IMF Working Papers

Fintech Potential for Remittance Transfers: A Central America Perspective

By Julia Bersch, Jean François Clevy, Naseem Muhammad, . Esther Perez Ruiz, Yorbol Yakhshilikov

June 25, 2021

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Julia Bersch, Jean François Clevy, Naseem Muhammad, . Esther Perez Ruiz, and Yorbol Yakhshilikov. Fintech Potential for Remittance Transfers: A Central America Perspective, (USA: International Monetary Fund, 2021) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper analyzes the potential for fintech to facilitate cheaper and more efficient remittances, and to enhance financial inclusion in Central America. Digital remittances remain nascent in the region, primarily reflecting behavioral inertia, small cost advantages of digital over traditional channels, and inadequate financial literacy. Through expanded alliances between traditional and fintech operators, digital remittances can further reduce transaction costs and reach those remote, low-income households in a timely and secure manner. A meaningful expansion of fintech remittances necessitates an enabling regulatory environment for digital financial services, and KYC and AML/CFT requirements proportionate to the value of transfers.

Subject: Balance of payments, Financial inclusion, Financial markets, Fintech, Mobile banking, Remittances, Technology

Keywords: C. remittances cost, Caribbean, Central America, East Asia, Financial inclusion, Fintech, Fintech remittance, Global, Mobile banking, Remittances, Remittances corridor, Remittances digitalization, Remittances' fee, South Asia

Publication Details

  • Pages:

    52

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2021/175

  • Stock No:

    WPIEA2021175

  • ISBN:

    9781513585420

  • ISSN:

    1018-5941

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