Global cost of remittance fees

Global average

According to the World Bank, 574 Billion USD was sent in remittances globally in 2016. But how much is taken out in fees for sending this money? The global average rate for sending $200 was 7.14% as of Q3 of 2017. This has gone down by 1.47% from Q2 and 21.83% since Q3 2012.

Key points:

• Total remittances worldwide in 2016: 574 Billion USD

Average rate in countries

Commission rates are affected by the country that you are sending to or from

While the global average rate is 7.14%, this rate will change depending on the country you are sending money to or from. This is due to regulations, taxes and international relations.

Select the relevant year/s you are interested in from the below filter on the right and hover over a country to see their historical rates. Values are averaged over the time period selected in the ‘Year’ filter.

Remittance commission rates in the G8 countries

The below graph illustrates how the average rate of remitting from G8 countries have changed over time.

Key points:

• Biggest increase/decrease since last quarter

• Biggest increase/decrease since Q3 2012

What about the average cost of remitting from G20 countries?

As of Q3 2017, the average fees for sending money from Australia, Canada, Germany, Japan and South Africa are above the global average.

Select the relevant period/s you are interested in from the below filter on the right. Values are averaged over the time period selected in the ‘Period’ or ‘Year’ filter.

Key points:

• Biggest increase/decrease since last quarter

• Biggest increase/decrease since Q3 2012

Breaking it down by the region of the world

As of Q3 2017 the cheapest region to remit to is South Asia at an average rate of 5.45%. In contrast, the most expensive region is Sub-Saharan Africa at 9.12% whilst the global average is 7.14%.

Key points:

• Biggest increase/decrease since last quarter

• Biggest increase/decrease since Q3 2012

The method of transfer makes a huge difference

Banks are and have always been by far the most expensive method to remit money compared to money transfer operators (MTO) and post offices when comparing Remittance Service Providers (RSP). Even so, we have seen bank rates decrease over the last few years. On the other hand, post office rates have been increasing.

Key points:

• Changes since last quarter

• Changes since Q3 2012

The method of sending money is another important factor of cost

The average cost of remitting money from a bank account is currently 8.56% as of Q3 2017. This is the only method above the global average of 7.14%.

Key points:

• Biggest increase/decrease since last quarter

• Biggest increase/decrease since Q3 2012

The form of payment on the receiving end also needs to be considered

The average cost of receiving funds from a bank account from 2011 to Q3 2017 is once again the most expensive method at 10.99%.

• Archive: 2008 - 2016

  Global average vs. weighted

  The amount of money sent from individuals in the US to other countries totals $134.96 billion. These transactions are also known as remittances. But how much is taken out in fees? According to the World Bank, the global average rate is 7.40% when sending $200 if you counted each remittance corridor (flow of money between two countries) equally, and 5.68% when weighted according to the size of the corridors is considered.

  Source: World Bank

  Embed “Global Weighted Average”

  <p><img src=”https://dvh1deh6tagwk.cloudfront.net/finder-us/wp-uploads/2017/01/Global-Weighted-Average.png” alt=”Global Weighted Average” /></p><p><a href=”https://www.finder.com”>diagram by finder.com</a></p>

  And this is low compared to rates in 2009

  Notice the trends in commission rate between Q1 2009, Q3 2016, and Q4 2016. Fees in the 0-5% range have been on the rise, and although those in the greater than 20% range have diminished since 2009 they are higher than last quarter.

  Source: World Bank

  Embed “Distribution of Average Total Costs”

  <p><img src=”https://dvh1deh6tagwk.cloudfront.net/finder-us/wp-uploads/2017/01/average-commissions-overt-time.png” alt=”Distribution of Average Total Costs” /></p><p><a href=”https://www.finder.com”>diagram by finder.com</a></p>

  Measuring rates if consumers were SmaRT

  But what if you did your research? And actually found the best rates available? The World Bank developed the Smart Remitter Target (SmaRT) to measure this for Q2 2016. SmaRT takes the simple average of the three cheapest money transfer providers when it comes to sending $200. In addition to being cheap, these SmaRT providers need to transfer your money within 5 days and be readily accessible.

  Quarter	Global SmaRT average	Difference between global average
  Q4 2016	5.54%	-1.86%
  Q3 2016	5.36%	-2.06%
  Q2 2016	5.40%	-2.20%

  Qualifying as a SmaRT provider is not always possible

  • In Q3 2016, 54 of the 365 corridors had less than 3 qualifying providers
  • In Q3 2016, 9 of the 365 corridors did not have any because they did not meet access criteria

  What country you are sending money to/from affects commission rates

  Due to regulations, taxes, international relations, and competition of money transfers in these countries the amount you’ll pay sending money to and from countries changes.

  Remittance commission rates in the G8 countries

  Compare Canada, France, Germany, Italy, Japan, Russia, UK, and US average cost of sending remittances from these countries.

  Source: World Bank

  Embed “Total Average in G8 Countries”

  <p><img src=”https://dvh1deh6tagwk.cloudfront.net/finder-us/wp-uploads/2017/01/total-average-in-G8-countries.png” alt=”Total Average in G8 Countries” /></p><p><a href=”https://www.finder.com”>diagram by finder.com</a></p>

  What about the average cost of remitting from G20 countries?

  Sending money from Australia, Canada, Japan, and South Africa were above the global average with South Africa’s average rate being more than twice that. The majority other 16 countries had rates below the global average.

  Source: World Bank

  Embed “Average cost of remitting from G20 countries”

  <p><img src=”https://dvh1deh6tagwk.cloudfront.net/finder-us/wp-uploads/2017/01/Screen-Shot-2017-01-30-at-10.18.15-PM.png” alt=”Average cost of remitting from G20 countries” /></p><p><a href=”https://www.finder.com”>diagram by finder.com</a></p>

  And the cost of sending remittances to the G20?

  From 2009 to 2013, the cost of sending USD 200 to G20 countries was above the global average. Since then, the spread has narrowed with the G20 rates dipping below the average from quarter to quarter. Overall, both global average and G20 average has significantly decreased since 2009.

  Source: World Bank

  Embed “Average cost of remitting from G20 countries”

  <p><img src=”https://dvh1deh6tagwk.cloudfront.net/finder-us/wp-uploads/2017/01/Screen-Shot-2017-01-30-at-10.18.22-PM.png” alt=”Sending remittances back from G20″ /></p><p><a href=”https://www.finder.com”>diagram by finder.com</a></p>

  Let’s break it down by region of the world

  EAP = East Asia Pacific, ECA = Europe & Central Asia, LAC = Latin American and Caribbean, MNA = Middle East & North Africa, SA = South Africa, SSA = Sub-Saharan Africa

  Source: World Bank

  Embed “Average total costs by region of the world”

  <p><img src=”https://dvh1deh6tagwk.cloudfront.net/finder-us/wp-uploads/2017/01/Screen-Shot-2017-01-30-at-10.18.33-PM.png” alt=”Average total costs by region of the world” /></p><p><a href=”https://www.finder.com”>diagram by finder.com</a></p>

  Now method of money transfer makes a big difference

  Banks are by far the most expensive method compared to Money Transfer Operators (MTO) and post offices when comparing Remittance Service Providers (RSP).

  Source: World Bank

  Embed “Total averages over time by RSP”

  <p><img src=”https://dvh1deh6tagwk.cloudfront.net/finder-us/wp-uploads/2017/01/Screen-Shot-2017-01-30-at-10.18.38-PM.png” alt=”Total averages over time by RSP” /></p><p><a href=”https://www.finder.com”>diagram by finder.com</a></p>

  This is where they stand Q4 2016

  Source: World Bank

  Embed “Total average by RSP type”

  <p><img src=”https://dvh1deh6tagwk.cloudfront.net/finder-us/wp-uploads/2017/01/Screen-Shot-2017-01-30-at-10.18.47-PM.png” alt=”Total average by RSP type” /></p><p><a href=”https://www.finder.com”>diagram by finder.com</a></p>

  The form of payment or instrument also matters when sending money

  Sending from bank account is most expensive (probably because you’re likely sending with a bank), followed by cash, then debit/credit card, and mobile money. Pre-paid cards are the cheapest.

  Source: World Bank

  Embed “Average cost by instrument used to fund transaction”

  <p><img src=”https://dvh1deh6tagwk.cloudfront.net/finder-us/wp-uploads/2017/01/average-cost-by-instrument-used-to-fund-transaction.png” alt=”Average cost by instrument used to fund transaction” /></p><p><a href=”https://www.finder.com”>diagram by finder.com</a></p>

  The form of payment on the receiving end also matters.

  Source: World Bank

  Embed “Average cost by means of disbursing remittances”

  <p><img src=”https://dvh1deh6tagwk.cloudfront.net/finder-us/wp-uploads/2017/01/Screen-Shot-2017-01-30-at-11.48.21-PM.png” alt=”Average cost by means of disbursing remittances” /></p><p><a href=”https://www.finder.com”>diagram by finder.com</a></p>

  Who should you send money with?

  As you can see there are a lot of factors when sending money overseas to consider. It’s unfortunately more confusing than it should be, but we’ve been through it too. To learn more about international money transfers and how to save on your transfers check out this guide.

For all media inquiries, please contact:

Richard Laycock, Insights editor and senior content marketing manager

E: uspr@finder.com

Hide

Sign up for the Finder newsletter

We know what the best deals in personal finance on the market are at all times, and now you will too.

Subscribeloading

By clicking Subscribe I agree to the Privacy and Cookies Policy, Terms of Use and to receive emails from Finder.