Beyond Technology: The Uneven Path Toward Cheaper Digital Remittances

What is it about?

Financial remittances that migrants and others send to families and friends abroad are an important source of economic support for many households in the Global South. Yet these funds can be rather costly to send, especially for low-income migrants who are transferring relatively small amounts of money. Receiving the funds can also be complicated for people in underdeveloped or rural areas, where banks and other formal financial institutions are rare. Increasingly, these challenges are being met with digital methods for sending remittances using mobile phones, internet platforms, or electronic payment systems. Digitization creates opportunities for cheaper and more transparent remittance transfers and can broaden financial access. At the same time, digitization brings regulatory challenges and may introduce new forms of exclusion. Particularly in countries and diasporas of the Global South, digital remittance pathways intersect with the human element of local informal economies that is crucial for the first- and last-mile outreach—the very beginning and end stages of remittance transfers, where individuals deposit and withdraw cash and where some of the most vexing obstacles can arise. This article reviews recent developments in the digitization of remittances, policy efforts to encourage their spread, and how the transfers interact with humans’ lived experiences, with a particular focus on sub-Saharan Africa. Cite this article: Daivi Rodima-Taylor. “Beyond Technology: The Uneven Path toward Cheaper Digital Remittances.” Migration Policy Institute, Migration Source Magazine, June 2023. https://www.migrationpolicy.org/article/cheaper-digital-remittances

Featured Image

Photo by Rodion Kutsaiev on Unsplash

Photo by Rodion Kutsaiev on Unsplash