Remittances Are Now Larger Than Foreign Aid. The Fees Have Not Caught Up.
The largest source of external finance for the world's poorer countries is not aid, and it is not investment by multinationals. It is money sent home by people who left. The World Bank estimates remittances to low- and middle-income countries at roughly 685 billion dollars in 2024, ahead of foreign direct investment and several times the value of official development assistance. For countries like Tajikistan, Tonga, Nepal and Honduras the flows are a fifth or more of national output.
The flows are also expensive to move. The World Bank's Remittance Prices Worldwide database, which surveys the cost of sending money across more than three hundred corridors, put the global average cost of sending 200 dollars at around 6.5 percent in 2024. The United Nations' Sustainable Development Goals set a target of 3 percent by 2030. Sending cash through a bank branch is the most expensive route; sending it through a mobile app to a digital wallet is the cheapest, often under 4 percent, and the gap between those two is where most of the industry's profit and most of its competition sits.
The traditional model was a network of agents: a counter in a city where migrants work and a counter in the town their families live in, connected by a company that moved the money between them and took a margin on the exchange rate as well as a fee. That model is being displaced by companies that hold licences in both countries, net their flows against each other, and settle only the difference. The customer sees a transparent fee and a mid-market rate; the company's cost is a fraction of the incumbents'.
The scale of that shift is visible in the public companies. Wise, listed in London, reported moving well over 100 billion pounds across borders in its 2025 financial year, at fees that fell over time as it scaled. Remitly, listed on Nasdaq, has grown to several million active customers across corridors from the United States to Latin America and Africa. Both were founded on the observation that banks were charging migrants the highest fees in finance for one of its simplest products.
Regulation is the constraint. Moving money across borders requires licences in each jurisdiction, compliance with anti-money-laundering rules that vary by country, and banking partners willing to hold the accounts. Sub-Saharan Africa, where costs are highest, is the region where the fewest companies hold the necessary licences, which is why a transfer to Lagos can cost twice what a transfer to Manila does.
The stakes for development are large. Every percentage point shaved from the average cost of remittances returns several billion dollars a year to households in poorer countries, without a single aid budget being touched. That is why the fee target sits in the Sustainable Development Goals alongside clean water and primary education.
The industry's own trajectory suggests the target is reachable in the digital corridors and distant in the cash ones. The people still paying 8 percent to send money home are, almost by definition, the ones with the least access to the apps that would charge them 3.
