Smart Remitter Target - SmaRT A NEW APPROACH TO MONITOR REMITTANCE PRICE TRENDS

Transcription

1 Smart Remitter Target - SmaRT A NEW APPROACH TO MONITOR REMITTANCE PRICE TRENDS

2 RATIONALE The Global average remains a simple, robust and sufficiently accurate tool to measure the impacts of cost reduction efforts SmaRT draws on lessons learned from operational work and will complement the global average in several ways, including: Being closer to remittance sender and receiver needs Better identifying issues of concern Informing data-drive policy making Being a more granular measure of impact 1

3 OBJECTIVE AND CALCULATION OBJECTIVE SmaRT aims to capture the average cost, in any given corridor, of the best options available to a well-informed customer, subject to certain characteristics, including speed, geographic coverage, and accessibility CALCULATION SmaRT will be calculated as the simple average of the three cheapest services that meet the criteria for inclusion for sending the equivalent of USD 200 in each corridor and will be expressed as a percentage of the total amount sent 2

4 THE SmaRT METHODOLOGY

5 A REMITTANCE SENDER NEEDS THE SERVICE TO Be reliable Be affordable Be accessible to the sender Reach the receiver conveniently Be fast enough 4

6 THE SERVICE SHOULD BE ACCESSIBLE BY THE SENDER Get to the physical location where service is offered Presence and location of outlets in sending country The sender must be able to Access remotely using technology (internet, phone ) Mobile phone penetration in sending country Internet penetration in sending country 5 AND, if a bank or other account is required, the sender needs to be able to access that Account ownership in sending country

7 THE SERVICE SHOULD REACH THE RECEIVER Get to the physical location where money is disbursed Presence and location of outlets in receiving country The receiver must be able to Receive the money in some electronic format Access to any technology that may be required for this purpose If account is required, the receiver needs to be able to access Mobile phone penetration in receiving country Internet penetration in receiving country Account ownership in receiving country 6

8 LET S PUT IT ALL TOGETHER Services to be included in the new indicator should: Be one of the 3 cheapest services available in the country corridor Make funds available to recipient within five days Deliver funds to the recipient nationwide, or in all relevant areas of the recipient s country Be available in all relevant areas of the sending country If access to an account or to internet or other technologies is required, access to these be nearly universal for senders and receivers in that country pair (minimum thresholds identified) 7

9 DATA SOURCES AND MINIMUM THRESHOLDS About the Data Remittance services Account Ownership Internet Penetration Mobile Phone Penetration Data Sources Definition World Bank Remittance Prices Worldwide Remittance service specific data (pricing, speed, coverage ) World Bank Findex Percentage of adults (age 15 and older) with an account International Telecommunic ation Union (ITU) Percentage of individuals using internet Publication Date Quarterly Thresholds Sending Countries Receiving Countries 8 80% 80% 75/100 50% 50% 50/100 International Telecommunic ation Union (ITU) Number of mobile subscribers per 100 people

10 WHO, WHAT, WHEN, HOW, WHY? WHO? WHAT? WHEN? HOW? WHY? GRWG members Participants at Jan 2016 meeting 9 Methodology Definition of terms Data sources Possible uses for SmaRT Draft methodology circulated in November 2015 Discussed at GRWG in January 2016 Additional comments submitted by March 2016 Final discussion at GRWG in April 2016 Final methodology published June 2016 Participate in discussions at GRWG Submit comments via To gather as many perspectives as possible, while ensuring a common aim and understanding

11 A PRACTICAL EXAMPLE

12 SENDING REMITTANCES TO ALBANIA Sending Country Services monitored in RPW sample Germany 7 3 Italy 18 4 Switzerland 5 2 United Kingdom 15 3 TOTAL SmaRT-eligible services 11

13 SENDER S PAYMENT OPTIONS Sender s payment options Full RPW sample SmaRT-eligible products Cash 27 8 Bank account transfer, Debit/credit card 4 1 Bank account transfer 10 1 Debit/credit card 3 2 Prepaid card 1 0 TOTAL

14 RECEIVER DISBURSEMENT: SMART-ELIGIBLE OPTIONS Pre-SmaRT Analysis Post-SmaRT Analysis 13

15 PRACTICAL CONSIDERATIONS /1 8% Average cost for all services in Germany-Albania # 18 Available services in Italy- Albania 10.3% Average cost for 3 cheapest SmaRT-eligible services # 4 SmaRT eligible services, all cash-based Conclusion Lower-cost services available but not accessible for all Conclusion Cashless services do not reach all 14

16 PRACTICAL CONSIDERATIONS /2 13% and 20% Average and SmaRT avg for Switzerland to Albania # 2 SmaRT-eligible services from Switzerland, both cash 9% and 5% Average and SmaRT avg for U.K. to Albania # 3 SmaRT eligible services from UK, all cashless Conclusion Competition has impact on cost and service types 15

17 THANKS!