New Methods in Remittance Transfer

1
New Methods in Remittance Transfer

• Robert Smith
• Manager
• Remittances and Payments Challenge Fund
• 23 August 2008

2
Bangladesh remittances at a glance
Remittances are a major economic resource for
Bangladesh Remittance growth, fuelled by
increasing worker migration, is impressive
Sources Bangladesh Bank, MoEW
3
2007 SAARC Remittances as a of GDP
Source World Bank
4
What migrants look for in a remittance product
5
Remittance basics
Agent
Agent
Bank
Bank
Cash Electronic transfer Message
6
The nightmare remittance
7
Hundi basics
Agent
Agent
Exporter
Importer
Cash Goods transfer Message
8
Bangladesh remittance processing

• Bank-centric market driven by currency
  restrictions
• Many players with two dominant (IBBL and Sonali
  have 35 of market)
• Traditional products (Cheque, TT, DD)
• Non cooperation on delivery
• 2006-2008 developments
• Non bank outlets for delivery (NGOs)
• New products being introduced (prepaid debit card
  and fast cash)

9
Improvements to Bangladesh remittance processing

• Increased use of non-bank branch outlets
• Increasing the number of remittance delivery
  points using NGO-MFI rural branches in migrant
  prone areas
• Use of bank-controlled non-branch outlets
  (ATM/POS)
• Introduction of new remittance products using
  technology solutions
• POS delivery to non-account debit card
• Use of mobile phone technology in payments and
  introduction of electronic wallet
• Co-operation on delivery
• Remittance gateway El Dorado
• BEFTN

10
Sundry Bangladesh Statistics
Sources Bangladesh Press
11
Remittance legal regulatory framework - 2009

• Payments systems and settlement regulations
• Identification of class of payment service
  provider needing authorisation of Bangladesh
  Bank
• Supervision of systemically important payments
  systems
• Cheque clearing and electronic payments systems
  standards
• Regulations on interchange of payments between
  banks
• Payment/ instrument clearing standards
• Consumer protection regulations for electronic
  transactions
• Review of foreign exchange and AML/CFT regulations

12
Challenge fund projects

• Improvements to remittance processing
• Remittance processing gateway/ instruction
  interchange with real time settlement
• Increased non-bank remittance delivery channels
  (bank-NGO partnerships, Telco outlets)
• New remittance products (Prepaid cards/ POS
  delivery Mobile phone E-wallet)
• New financial products to diversify remittance
  investment
• First open-ended mutual fund
• Use of remittances for productive use
• Entrepreneurship/ vocational skills capacity
  building for returnee migrants and migrant
  families
• Improved information on migration and remittance
  channels
• One stop, single number, call centre
• Increased access to formal sector migration
  finance

13
Longer term vision

• Common use of 3G/4G and phone accessed internet
• Remittances originated in one country on a mobile
  phone transferred in seconds to a mobile phone
  accessible account in another country (??)
• Increased use of the formal transfer system by
  migrants
• Increased card use for cash out at ATM and POS
• World wide remittance clearing system (VISA)
• Increased use of technology to help the
  illiterate access these services (voice sms,
  fingerprint readers)
• Close supervision of the system especially for
  money laundering activity
• Merging of card and mobile remittance systems

14
http//www.rpcf.org