How Training and Advice Can Speed Cross-Border Payments and Cut Costs

IMF Blog, January 3, 2024

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Faster, cheaper, and more transparent cross-border payment services can support economic growth, international trade, global development, and financial inclusion.
The Group of Twenty has prioritized progress on cross-border payments.

The global average cost of sending $200 from one country to another is about $12.50 in the first quarter of 2023, or 6.25 percent, according to the World Bank’s Remittance Prices Worldwide database.
The G20 have set a target, reaffirming the United Nations Sustainable Development Goal, of a global average cost for sending a $200 remittance of no more than 3 percent by 2030, with no corridors higher than 5 percent.
Some corridors far exceed targets:
- Fees exceed 50 percent for funds sent from Türkiye to neighboring Bulgaria.
- Tanzanian remittances to Uganda and Kenya incur fees over 30 percent.
- Sending across South Africa’s borders with Botswana, Eswatini, and Lesotho is notably costly.

High fees, especially bank-to-bank transfers, are a main driver of high costs for corridors between emerging market and developing economies.
Bank fees tend to be much lower for transfers originating in advanced economies; foreign-exchange margins can be 50 percent or more of the cost in some corridors.

The Financial Stability Board acknowledged in a recent report that progress under the roadmap to enhance cross-border payments will be needed to meet the targets across wholesale, retail, and remittances market segments.
Global targets require coordinated and customized assistance at the country level to address specific challenges.

International organizations such as the IMF and World Bank will need to play a key role by sharing best practices through technical assistance for member countries.
The IMF shares knowledge with government institutions such as finance ministries and central banks through hands-on advice, training, and peer-to-peer learning.
Capacity development is a core IMF mandate and accounts for nearly a third of the IMF budget.
The IMF will focus in coming years on:
- Improving access to payment systems;
- Extending and aligning operating hours;
- Interlinking of payment systems;
- Combating money laundering and the financing of terrorism;
- Harmonizing payment systems by adopting the global and open standard for exchanging financial information, known as ISO 20022.
The IMF will also collaborate with the World Bank at the country and project level.

Source: Kieran Murphy, January 3, 2024.