## Fintech Potential for Remittance Transfers: A Central America Perspective

_IMF Working Papers, June 25, 2021_

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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

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### 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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_Source: https://www.imf.org/en/publications/wp/issues/2021/06/25/fintech-potential-for-remittance-transfers-a-central-america-perspective-461266_