RESTRICTED  
  
JOB/SERV/CTFS/2/Rev.2  
 
26 October 2023  
(23-7252) Page: 1/4 
Committee on Trade in Financial Services  Original: English  
 
 
 
 
COMMUNICATION FROM INDIA,  THE PHILIPPINES AND SOUTH AFRICA  
PROPOSAL FOR A THEMATIC SEMINAR  
"COST OF REMITTANCE SERVICES"  
Revision1 
The following communication, dated 26 October 2023, is being circulated to Members of the 
Committee on Trade in Financial Services, at the request of the delegation of India, the Philippines,  
and South Africa.  
 
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1. The significant positive contribution of remittances towards soci o-economic development of 
households and communities, especially in developing countries including LDCs, is well recognized. 
As per the World Bank estimates, out of total remittances of USD 794 billion in 2022, USD 626 billion 
(about 79%) went to Low and M iddle Countries.2 Remittances service is a critical financial service 
used by the sender and receivers, thus providing a point of contact with the financial sector that can 
be leveraged to increase access to other financial services and inclusion in finan cial services trade. 
Because of the close relationship between such international money transfers and sustainable 
development, policymakers have promoted initiatives to support such transfers. In particular, the 
need to reduce the cost of sending remittanc es has become one of the key issues in the international 
development agenda. If the cost of sending remittances could be reduced by 5 percentage points 
relative to the value sent, remittance recipients in developing countries would receive over 
USD 31.30 b illion more each year than they do now.  
2. The United Nations (UN) included a target for remittance cost reduction in the Sustainable 
Development Goals (SDGs). The target aims to reduce the global average cost of sending USD 200 
to less than three per cent by 2030 and to ensure that, by then, each corridor’s cost for sending 
USD 200 is not more than five per cent. In 2020, the G20 prioritized the enhancement of cross -
border payments, including remittances.  
3. The remittance industry can be supported with a ppropriate regulation and  improved 
cooperation. The digitalization of remittance flows is growing and has the potential to increase 
financial inclusion and reduce the cost of remittance services. The Covid -19 pandemic has 
accelerated the trend towards digi talization of retail financial services. However, cash -based 
remittances still remain the most prevalent payment instrument in most receive markets.  
4. Proponents suggests having a dedicated seminar on the issue of ‘Cost of Remittance Services’ 
at the Commit tee on Trade in Financial Services (CTFS). This would go a long way in bringing the 
focus of CTFS on trade in this significant financial service.  
 
1 This revision modifies the previous document JOB/SERV/CTFS/2 by adding South Africa  as co-sponsor 
and modifying the title as appropriate. This is in addition to the substantive changes made by the proponents 
elsewhere in the document.  
 2 https://www.knomad.org/publication/migration -and-development -brief-37. JOB/SERV/CTFS/2/Rev.2  
 
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  5. A draft agenda for the proposed seminar is attached to this communication. The discussions 
and presentations u nder the agenda items in the Annex may be from the global, regional and 
national perspectives.  
6. We eagerly await the opportunity to work with the Secretariat and other Members in order to 
develop a meeting of interest and utility to all Members.  
 
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  JOB/SERV/CTFS/2/Rev.2  
 
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  ANNEX  
DRAFT ANNOTATED AGENDA  
Sessions  
SESSION 1 – REMITTANCES UNDER THE GENERAL AGREEMENT ON TRADE IN SERVICES 
(GATS)  
The GATS provides the legal foundation for the cross -border supply of services, including sectors 
linked to remittances such as  money transmission and other financial services. There are several 
ongoing processes of international cooperation that will help to enrich discussions on this critical 
financial service.  
 
Recalling that the UN SDG Goal 10.c states that "By 2030, reduce to  less than 3 per cent the 
transaction costs of migrant remittances and eliminate remittance corridors with costs higher than 
5 per cent". The primary goal target applies to Goal 10, that is, "Reduce  inequality within and among 
countries ", which is aligned to the WTO’s development agenda.  
 
Thematic Discussion: This Session aims to provide Members  with an opportunity to discuss  their 
progress for this goal including trends in respect of regions and remittance corridors.  The session 
will also focus on how international remittances are disciplined under GATS and share information 
on complementary cooperation processes relevant to the SDG target and GATS . 
 
SESSION 2 – IMPACT OF REMITTANCES ON DEVELOPMENT  
Recent work in the CTFS has focused on enhancing financial inclusion , particularly for vulnerable 
groups, including MSMEs, rural communities and women.  Remittances also play a complementary 
role for economic  participation and empowerment and ha s linkages to other financial services, 
including microfinance and insurance.  
   
Thematic Discussion : The Session will also focus on better information and understanding the 
development impact of cross -border remittanc es, particularly in advancing financial inclusion and 
access to credit in developing countries including LDCs.  The Session will include national experiences 
representing a geographical and developmental cross -section among the WTO membership.  
 
SESSION 3 – MARKET STRUCTURE, TRENDS AND DRIVERS OF COST OF REMITTANCE 
SERVICES WORLDWIDE AND ACROSS REGIONS/COUNTRIES INCLUDING  DEVELOPING 
COUNTRIES AND PARTICULARLY LDCS   
The global average cost for sending remittances, though it has declined over  time, remains high , 
and the experience varies across countries/regions. If the cost of sending remittances could be 
reduced by 5 percen tage points relative to the value sent, remittance recipients in developing 
countries would receive over USD 31.30 billion more each year than they do now.  
 
The cost of sending remittances is influenced by several factors , such as the mode of transfer, 
intermediaries or service providers involved and their cost structures/revenue sharing 
arrangements, market structure and extent of competition, payment infrastructure and interlinking 
arrangements/interoperability between jurisdictions , and prevailing regula tions in both source and 
destination countries. Some of the challenges associated with lowering the cost of remittance 
services include limited competition, the phenomenon of 'de -risking' among banks, financial 
exclusion , and digital exclusion.  
 
Thematic D iscussion:  This session aims to focus on examining the market structures, trends in 
remittance flows, and drivers of the cost of remittance services both worldwide and across 
countries/regions, efforts undertaken to address these drivers and the potential impact of a reduction 
in the cost of remittance services. When examining this, the session may particularly focus on the 
issue from the experience of developing countries including LDCs.  
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  The session will also aim to examine historical trends in remittance  services, evolution of the 
regulatory and competitive landscape, and  the impact of the Covid -19 pandemic.  
 
SESSION  4 – OPPORTUNITIES  IN LOWERING  THE  COST  OF REMITTANCE  SERVICES  – BEST  
PRACTICES/INITIATIVES  AND  COLLABORATIVE  ACTION   
There are significant o pportunities for lowering the cost of remittance services. Key steps have been 
taken and achieved towards reaching the 2030 goal of reducing sending costs to below 3% for 
remittances transferred, particularly bearing in mind the recent process of massive f ormalisation 
and digitalisation of remittances during the pandemic. There is immense potential for further efforts 
in this direction.  
 
Thematic discussion: This session aims to focus on ways to address the identified challenges and 
utilise the opportunitie s related to lowering the cost of remittance services and improving the quality 
of services more broadly, including through enhanced availability and accessibility. The session will 
consider how technology, emergence of new market players , different types of providers  and new 
channels, and consumer behavior are impacting remittance services.   
 
This session will also allow for the exchange of information between Members and presentation s by 
experts on initiatives/best practices related to policy and regulatory responses , with a view to 
crystallis ing lessons learn t and identify ing potential for collaborative action. This session will also 
explore avenues to benchmark with least -cost models  of remittances prevailing in some parts of the 
world through financial inclusion, disruption in technology, through fintech, innovation etc. The 
Session will also allow  Members to share  ideas and opportunities for lowering the cost of remittance 
services,  exploring  how lowered cost s of remittances help developing countries and LDCs . 
 
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