Reducing remittance costs are recognized as a vital element of the financing for development strategy and is one of the targets in the Sustainable Development Goals and the Addis Ababa Action Agenda. However, studies show that remittances remain to be a private affair operating mostly at household level.
It is also expected that reduced costs would encourage use of formal channels such as banks and money transfer operators. There are increasingly more money transfer operators in the market offering lower costs among the mainstream MTOs and digital ones. Mobile phone companies and many small operators are also competing on costs. Dilip Ratha clearly puts the argument for reduced costs in his TED talk.