What Explains Remittance Fees? Panel Evidence

This paper uses data across 365 corridors to document time and country variation in remittance fees and explore factors predicting variation in remittance fees. We document a general reduction in such fees over the past decade although the goal of fees below 3 percent has not been met yet in many co...

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Bibliographic Details
Main Author: Beck, Thorsten
Other Authors: Janfils, Mathilde, Kpodar, Kangni
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2022
Series:IMF Working Papers
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
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653 |a International finance 
653 |a Population & demography 
653 |a Economic & financial crises & disasters 
653 |a Exchange rate arrangements 
653 |a International Trade Organizations 
653 |a Demographic Economics: General 
653 |a Currency; Foreign exchange 
653 |a Trade Policy 
653 |a Economics: General 
653 |a Balance of payments 
653 |a Long-term Capital Movements 
653 |a Informal sector; Economics 
653 |a Exports and Imports 
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653 |a International economics 
653 |a Economics of specific sectors 
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653 |a Foreign Exchange 
653 |a Currency crises 
653 |a International trade 
653 |a Demography 
653 |a Capital controls 
653 |a Population 
653 |a Macroeconomics 
653 |a Capital movements 
653 |a Remittances 
653 |a Foreign exchange 
653 |a International Investment 
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700 1 |a Kpodar, Kangni 
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520 |a This paper uses data across 365 corridors to document time and country variation in remittance fees and explore factors predicting variation in remittance fees. We document a general reduction in such fees over the past decade although the goal of fees below 3 percent has not been met yet in many corridors. We identify both cost- and risk-based constraints and market structure as barriers to lower remittance fees. Higher transaction costs as result of a more rural population in the sending country and lower scale are associated with higher remittance fees. However, lower risks due to the stability of fixed exchange rates and Internet rather than cash payment are associated with lower remittance fees. Finally, remittance corridors dominated by banks and few players are characterized by higher fees