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Cost of cross-border remittances still too high: InstaReM

ANI | Updated: Jan 30, 2018 11:43 IST

New Delhi [India], Jan 30 (ANI): The Remittances Prices Worldwide's (RPW) update for December 2017 indicated that the costs of cross-border remittances are still a long way from the United Nation's Sustainable Development Goals (SDG) target of a global average three percent to be reached by 2030.

In the 4th quarter of 2017, the global average cost of sending remittances was 7.09 percent, below the 7.21 percent global average during the Q3. Since Q3 of 2014, the Global average has remained below 8 percent.

Currently, South Asia remains the lowest-cost receiving region at 5.34 percent while sub-Saharan Africa remains the most expensive at 9.27 percent.

While 7.09 percent is a new low in this, the downward trend in remittance costs has been sluggish at best.

The RPW indicators are used to monitor the progress towards targets of global efforts for the reduction of global remittance costs. From the current 7.09 percent to a desired 3 percent is a long way away.

It will take outliers such as InstaReM, co founder by Indian entrepreneur Prajit Nanu, to lower the cost of remittances and make a dent in the high premiums charged by the traditional service providers like banks, Money Transfer Operators (MTOs) and post offices. What keeps the cost of cross-border money transfers high is the hidden FX Spread - the difference between the wholesale inter-bank FX rate and the rate quoted by the bank / MTO - which is not known to the senders.

"InstaReM is able to transfer funds within 24 hours in Asia, which is much superior to requirements outlined by the SmaRT indicator, which looks at remittances that happen within 5 days. Our aim is to now drive the adoption rate of technological innovations across both business as well as individual consumers on a larger base of customers," said co-founder InstaReM, Prajit Nanu.

"Currently InstaReM is able to send money internationally to over 3.21 billion people across the globe at Real Time FX Rates, and transparent fees as low as 0.25 percent. Since we have the EU &US markets in sight this year, we will have scale to contribute substantially towards the G8 and G20 commitment to reduce the global average cost of remittances to 5 percent," added Prajit Nanu.

InstaReM is licensed to offer money transfers out of Australia, Singapore, Hong Kong, Malaysia, India and Canada. For the last three quarters, the World Bank has consistently ranked InstaReM as the one of the most competitive remittance platforms in a number of Asian corridors from Australia and Singapore. InstaReM is to launch its India-outbound operations in the current quarter. (ANI)