Fintech Potential for Remittance Transfers: A Central America Perspective
IMF Working Papers, June 25, 2021
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- Canonical URL
- Fintech Potential for Remittance Transfers: A Central America Perspective
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Bibliographic details
- Authors: Julia Bersch, Jean François Clevy, Naseem Muhammad, Esther Perez Ruiz, Yorbol Yakhshilikov
- Published: June 25, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513585420.001
Key findings and analytical conclusions
- The paper analyzes the potential for fintech to facilitate cheaper and more efficient remittances, and to enhance financial inclusion in Central America.
- Digital remittances remain nascent in the region, primarily reflecting:
- behavioral inertia,
- small cost advantages of digital over traditional channels, and
- inadequate financial literacy.
- Through expanded alliances between traditional and fintech operators, digital remittances can:
- further reduce transaction costs, and
- reach remote, low-income households in a timely and secure manner.
- A meaningful expansion of fintech remittances necessitates:
- an enabling regulatory environment for digital financial services, and
- KYC and AML/CFT requirements proportionate to the value of transfers.
Policy recommendations and implementation priorities
- Promote expanded alliances between traditional financial operators and fintech firms to lower transaction costs and extend reach to remote, low-income households.
- Strengthen financial literacy initiatives to address behavioral inertia limiting digital remittance adoption.
- Create an enabling regulatory environment for digital financial services that balances innovation and consumer protection.
- Ensure KYC and AML/CFT requirements are proportionate to the value of transfers to avoid unnecessarily hindering low-value digital remittances.
Publication metadata and identifiers
- Authors: Julia Bersch, Jean François Clevy, Naseem Muhammad, Esther Perez Ruiz, Yorbol Yakhshilikov
- Date: June 25, 2021
- Series: Working Paper No. 2021/175
- Issue: 175
- Volume: 2021
- Pages: 52
- DOI: https://doi.org/10.5089/9781513585420.001
- Stock No: WPIEA2021175
- ISBN: 9781513585420
- ISSN: 1018-5941
Thematic tags and subjects
- Subject: Balance of payments, Financial inclusion, Financial markets, Fintech, Mobile banking, Remittances, Technology
- Keywords: C. remittances cost, Caribbean, Central America, East Asia, Financial inclusion, Fintech, Fintech remittance, Global, Mobile banking, Remittances, remittances corridor, remittances digitalization, remittances' fee, South Asia
Source: IMF Working Papers — "Fintech Potential for Remittance Transfers: A Central America Perspective", June 25, 2021.
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- Working Paper