Leaving No One Behind: Inclusive Fintech for Remittances
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Highlights
Migrants remitted US$ 860 billion in 2023, yet fintech’s promise to cut remittance costs and broaden inclusion has been limited by access, digital literacy, and fraud risks.
- Mobile money transfers cost an average of 4.1 percent per transaction in 2023 versus 12 percent through banks. Yet nearly 400 million people lack mobile broadband; some corridors, such as Tanzania–Uganda, saw costs near 39 percent.
- Barriers hit women hardest: globally, 372 million women lack a mobile phone, and in countries such as Nigeria and Sri Lanka, gender gaps in digital payments usage stand at 16 to 18 percentage points.
- Fraud risks are surging—fraudulent mobile app transactions grew 83 percent between 2019 and 2020, far outpacing overall transaction growth—while many users lack accessible complaint and redress mechanisms.
- Progress will require governments, telecoms, and fintechs to cut costs in underserved corridors, expand agent networks, build digital financial literacy, and strengthen consumer protections.
Remittances are an important source of support for migrants’ families, communities, and origin countries. However, the remittance industry has long been dominated by a few players whose services have high transaction costs, blunting the development benefits of these money transfers.
By easing access to financial services, mainly via mobile phones, some countries and development actors hope that financial technology (or fintech) will change this status quo. Many believe that such technologies—namely mobile money and cryptocurrencies—hold the potential to boost migrants’ inclusion in financial systems and enhance the development benefits of remittances. Yet, many obstacles remain to widening these digital tools’ reach and usability, and safeguards are needed to protect users against new risks.
This report explores the growing use of digital financial services for international remittances, including changes during the pandemic and a look at gendered aspects of these technologies’ impacts. The analysis draws, in part, on insights from expert interviews as well as focus groups conducted in Nigeria and Sri Lanka with users and nonusers of digital remittance services.
The report results from a multiyear research partnership between MPI and the Swiss Agency for Development and Cooperation’s Thematic Section Migration and Forced Displacement to support the development of global solutions for migration-related challenges.
Table of Contents
1 Introduction
2 The Fintech Sector, Remittances, and the COVID-19 Crisis: What Has Changed?
A. How the Fintech Sector Has Changed
B. Limitations of the Fintech Sector
3 Risks and Barriers to Financial Inclusion for Migrants and Their Communities
A. Barriers to Access
B. Barriers to Use
C. Risks of Digital Remittance Channels
4 Conclusions
About the Global Program
The Global Program bridges policy advice, research, and candid dialogue to design effective migration policies, drawing on global evidence and anticipating the forces reshaping how people move.
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