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What are the remittance fees worldwide?

The global average rate is 7.40%, but it really depends if you’re looking by country, type of provider, or form of payment.

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.

Global Weighted AverageSource: World Bank

Embed “Global Weighted Average”

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.

average commissions overt timeSource: World Bank

Embed “Distribution of Average Total Costs”

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.
QuarterGlobal SmaRT averageDifference between global average
Q4 20165.54%-1.86%
Q3 20165.36%-2.06%
Q2 20165.40%-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.

total average in G8 countriesSource: World Bank

Embed “Total Average in G8 Countries”

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.

Average cost of remitting from G20 countriesSource: World Bank

Embed “Average cost of remitting from G20 countries”

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.

Sending remittances back from G20Source: World Bank

Embed “Average cost of remitting from G20 countries”

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

Average total costs by region of the world remittancesSource: World Bank

Embed “Average total costs by region of the world”

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).

Total averages over time by RSPSource: World Bank

Embed “Total averages over time by RSP”

This is where they stand Q4 2016

Total average by RSP typeSource: World Bank

Embed “Total average by RSP type”

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.

average cost by instrument used to fund transactionSource: World Bank

Embed “Average cost by instrument used to fund transaction”

The form of payment on the receiving end also matters.

Average cost by means of disbursing remittancesSource: World Bank

Embed “Average cost by means of disbursing remittances”

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. The finder.com Money Transfer Awards actually sent transfers, generated quotes, and conducted usability testing to find out which providers had the Best Transfer Rates, Fastest Transfers, Best User Experience, and were the Most Trustworthy and Most Convenient. To learn more about international money transfers and how to save on your transfers check out this guide. You can also compare current available rates by country here.

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