Transcript World Bank – CPSS General Principles for International

The General Principles for International
Remittance Services
-
General Overview in the Pacific
Remittances and Financial Inclusion Workshop
July 18 2012, Sydney
Carlo Corazza
Payment Systems Development Group
Financial Infrastructure Service Line
Financial Inclusion Global Practice
World Bank
Top remittance recipients in 2011
Resilience of remittances across all regions
40%
Percent
20%
East Asia and Pacific
Europe and Central Asia
Latin America and Caribbean
Middle-East and North Africa
South Asia
Sub-Saharan Africa
0%
20
08
20
09
20
10
20
11
e
20
12
f
20
13
f
-20%
Source: Migration and Remittances Unit, World Bank
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Remittance flows to developing countries
$ billion
Developing countries
East Asia and Pacific
Europe and Central Asia
Latin America and Caribbean
Middle-East and North Africa
South Asia
Sub-Saharan Africa
2010
2011e
2012f
2013f
2014f
330
370
397
428
464
95
37
57
38
82
21
107
41
62
40
97
22
115
45
66
42
104
24
125
49
72
44
113
25
135
55
77
47
122
27
7.0% 12.2% 7.3%
7.8%
8.4%
10.6%
0.3%
0.9%
12.4%
9.5%
1.9%
8.0%
10.1%
7.9%
5.3%
7.9%
6.8%
8.7%
11.4%
8.2%
5.5%
8.4%
7.4%
Growth rate (%)
Developing countries
East Asia and Pacific
Europe and Central Asia
Latin America and Caribbean
Middle-East and North Africa
South Asia
Sub-Saharan Africa
12.6%
12.6%
7.7%
6.1%
18.2%
8.5%
7.3%
8.8%
7.6%
5.1%
7.4%
6.3%
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Remittance Prices Worldwide - Global Trends
Global Average and International MTO Index
11%
10%
9%
8%
7%
6%
• In the First Quarter 2012 the
total global average of
sending USD 200 worldwide
remained stagnant and
decreased only from 9.30% to
9.12% from Q3 2011
• A similar trend was observed
for the International Money
Transfer Operator (MTO)
Index, which includes all the
MTOs that are present in over
85 percent of the RPW
corridors.
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Remittance Prices Worldwide
Remittance Sending Countries (Q1, 2012)
25.00%
22.38%
21.45%
Global Average
Q1, 2012 9.12%
Global Average
Q3, 2011 9.30%
20.00%
18.77%
15.70%
15.00%
14.14%
13.00%
11.02%
10.00%
12.49%
12.23%
11.78%
11.16%
11.08%
10.34%
9.72%
9.49%
9.20%
8.51%
7.88%
6.73%
5.54%
5.00%
3.84%
5.32%
6.54%
5.11%
4.22%
6.62%
7.93%
6.91%
4.80%
3.98%
2.33%
0.00%
•Note: high volatility of foreign exchange rates against the US Dollar may result in higher costs
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Remittance Prices Worldwide
Remittance Costs Trend by Region (2008 – Q1 2012)
16%
14%
12%
10%
8%
6%
4%
2%
0%
2008
1Q2009 3Q2009 1Q2010 3Q2010 1Q2011 3Q2011 1Q2012
EAP
ECA
ECA (excl Russia)
LAC
MENA
SA
SSA
Global
• SA showed a significant cost
increase from Q3 2011 to Q2 2012
• Remittance costs in all regions,
except ECA, have come down from
2008
• However, the Global remittance
costs still lack a drastic reduction
• Most regions have experienced
significant fluctuations of remittance
costs
• The recent financial crisis and
regional crises appear to have
negatively affected remittance costs
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Remittances as % of GDP and Remittance Costs in
Receiving Countries in the East Asia and Pacific Region
30.0%
• Remittances costs to
Malaysia, Philippines, and
Indonesia are the lowest
among the EAP countries
• Remittances costs to Pacific
Islands tend to be high
• EAP as a whole showed a
semi-annual cost reduction of
5.4%
• However, Fiji and Vanuatu
showed significant yearly cost
reduction (-20.57% and 21.97% respectively)
• Samoa had a semi-annual
cost increase of 23.93% while
Fiji had a cost decrease of 18.29%
25.00%
25.0%
20.00%
20.0%
15.00%
15.0%
10.00%
10.0%
5.00%
5.0%
0.0%
0.00%
Remittances as % of GDP (2010)
Average Cost of Remittances (%)
(Q1, 2012)
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World Bank – CPSS General Principles for International
Remittances Services
GP1: The market for remittances should be transparent and have adequate consumer
protection
GP2: Improvements to payment system infrastructure that have the potential to increase
the efficiency of remittance services should be encouraged
GP3: Remittance services should be supported by a sound, predictable, non-discriminatory
and proportionate legal and regulatory framework
GP4: Competitive market conditions, including appropriate access to domestic payments
infrastructures, should be fostered in the remittance service industry
GP5: Remittance services should be supported by appropriate governance and risk
management practices
Remittance Service
Providers
Public Authorities
Should participate actively in the application of the general
principles
Should evaluate what action to take to achieve the public policy
objectives through implementation of the general principles
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World Bank – CPSS General Principles for International
Remittances Services: Situation in the Pacific
GP1: The market for remittances should be transparent and
have adequate consumer protection
- Transparency is still limited for consumers and RSPs are
not providing adequate information to migrants
- Authorities have adopted effective initiatives in this area and
they have showed their effects in terms of price reduction
- When it comes to financial services and remittances,
consumer protection is not yet fully guaranteed across most
of the countries
World Bank – CPSS General Principles for International
Remittances Services: Situation in the Pacific
GP2: Improvements to payment system infrastructure that have
the potential to increase the efficiency of remittance services
should be encouraged
- Receiving countries lack of supportive payment systems
infrastructure that would facilitate smoother processing of the
transactions
- Cash is still largely predominant both in sending and receiving
countries
- Retail payment systems strategies of authorities and industry,
in both receiving and sending countries, have not included
remittances as a relevant topic
World Bank – CPSS General Principles for International
Remittances Services: Situation in the Pacific
GP3: Remittance services should be supported by a sound,
predictable, non-discriminatory and proportionate legal and
regulatory framework
- Remittances are often regulated through an array of different
law and regulations, under the umbrella of various authorities
- Compliance with AML/CFT regulation might represent the most
relevant variable of the internal costs of the RSPs
- Authorities should strive to balance the risk posed by the
remittances business with the compliance requirements and
avoid over-regulation
World Bank – CPSS General Principles for International
Remittances Services: Situation in the Pacific
GP4: Competitive market conditions, including appropriate access
to domestic payments infrastructures, should be fostered in the
remittance service industry
- Sending and receiving markets experience different
concentration of operators in the market
- Anti-competitive agreement are in place, but the most relevant
effects are on the sending side, where the level of
concentration is sensibly higher
- There is a tendency to restricting MTOs access to the payment
systems infrastructure, which could lead in the long term to
relevant problems of further limitation of competition
World Bank – CPSS General Principles for International
Remittances Services: Situation in the Pacific
GP5: Remittance services should be supported by appropriate
governance and risk management practices
- In the region there is a general adequate level of compliance
with corporate governance principles
- Risk management is in place and there are no indications of
major shortfalls in this area
- Constant attention should be dedicated to the risks of fraud and
the consequence in terms of consumer protection and
reputation of the whole industry
Thank you!
[email protected]
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