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

_IMF Blog, January 3, 2024_

## Source details

**Canonical URL:** [How Training and Advice Can Speed Cross-Border Payments and Cut Costs](https://www.imf.org/en/blogs/articles/2024/01/03/how-training-and-advice-can-speed-cross-border-payments-and-cut-costs)

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## Bibliographic details
- Authors: Kieran Murphy
- Published: January 3, 2024

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### Importance of faster, cheaper, transparent cross-border payments
- 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.

### Global cost landscape and targets
- 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.

### Main drivers of high costs
- 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.

### Progress monitoring and the need for coordinated action
- 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.

### Role of the IMF, World Bank, and technical assistance
- 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.*

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## References

- [a new paper](https://www.imf.org/en/Publications/Policy-Papers/Issues/2023/12/22/IMF-and-World-Bank-Approach-to-Cross-Border-Payments-Technical-Assistance-542886)

_Source: https://www.imf.org/en/blogs/articles/2024/01/03/how-training-and-advice-can-speed-cross-border-payments-and-cut-costs_