REDUCING COST OF REMITTANCES
communication from India
The following communication*, dated 8 March 2024, is being
circulated at the request of the delegation of India.
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1. We
recognize the significant positive contribution of cross-border remittances
towards socio‑economic development of households and communities especially in
developing countries including LDCs and acknowledge that out of total
remittances of USD 860 billion in 2023, USD 669 billion (about 78%)
went to Low and Middle Income Countries (LMIC).[1]
2. We understand that cross border payments
and money transmission service is a critical financial service used by the
sender and receivers for cross-border remittances, thus providing a point of contact
with the financial sector that can be leveraged to increase access to other
financial services, achieve financial inclusion and enhance participation in
financial services trade.
3. In view of the close relationship between
such services and sustainable development, we underline the need to reduce the
cost of cross-border remittances. We reaffirm our commitment to the UN SDG Goal
10.c to reduce to less than 3 per cent the transaction costs of remittances and
eliminate remittance corridors with costs higher than 5 per cent by 2030 with a
view to achieve the primary goal target, that is, 'Reduce inequality within and
among countries' which is aligned to the WTO's development agenda.
4. We highlight that the global average cost
for sending remittances, though has declined over time, remains high at 6.18
per cent—more than twice the SDG target, and the experience varies across
countries and regions.
5. We recognize that one of the main factors
explaining the growth and demand for cross border payment services is the
expansion in international remittances and underline the need to promote and
facilitate trade in these services.
6. We highlight that one of the means to
achieve cheaper, faster, and more transparent and accessible cross-border
payments including remittances is promoting interoperability and interlinkages
of digital payment infrastructures including fast payment systems. The global
average cost for digital remittances at 4.84 per cent is significantly lower
than the cost for non-digital remittances.[2]
7. We acknowledge the important work being
undertaken by the international organizations in reducing the cost of
remittances.
8. We welcome the
decision of the Committee on Trade in Financial Services to hold a Thematic
Session on 'Cost of Remittances' in March 2024.
9. In view of the above, the General Council calls
upon the Council for Trade in Services and Committee on Trade in Financial
Services to undertake a Work Programme consisting of efforts to:
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