Understanding the G20 Global Remittance Cost Target

In 2015, the G20 member states committed to a flatter, more connected world and set a target to reduce the average cost of sending $200 home to under 3% by 2030. They also wanted to ensure no corridor costs more than 5%. In early 2019, the global average was around 7%, and by Q3 of 2025, it had fallen to 6.3%. Even after a public commitment by the world's top nations, backed by the UN, the average cost moved by less than one percentage point.

Before going into why reducing this number seems such a difficult task, we should look at what is hidden in this average:

78% of corridors globally were below the 5% threshold, and just 22% were above it. They still pulled the global average up because the long tail of corridors is very, very expensive. Another split is the digital-versus-non-digital divide. Digital remittances were much cheaper, costing around 4.6%, while non-digital remittances cost 7.3%. South Asia was the cheapest region at 4.2%, and sub-Saharan Africa was at 8%. All intra-African corridors were above 10%, with some even at 20%.

There is a world where transferring money is cheap. This is the world of digital and mobile payments. The second world is expensive, cash-dependent, and thinly served, with costs that are multiples higher than in the other.

So, how do the corridors that are cheap become cheap? Specific structural characteristics make these corridors cheap. These include digital rails, mobile coverage for receivers, and robust competition that lowers prices. Digital rails and mobile networks remove multiple middlemen and cash. Both would make up a large part of the cost, and competition does the rest.

On the other hand, expensive corridors remain expensive because they cannot eliminate certain costs. First, the liquidity of the receiving currency plays a role. All of these expensive corridors have something in common. They involve thin, illiquid currencies with few counterparties, which results in high spreads because it is risky to make this market. No provider can provide liquidity in a currency that lacks trading depth. Then there is a lack of competition. These corridors are very thinly served and often dominated by a few banks. Few providers mean less price pressure, allowing them to charge a high premium. The third factor is last-mile access. In most expensive corridors, formal account penetration is low, and cash dependency is high, so the last mile relies on physical agents and cash, which costs much more than digital channels. These are cost items, not margin items. The provider doesn't benefit from higher margins because of these. These are costs that the provider needs to bear to make these corridors work.

The recipe for a cheaper, more competitive corridor is digital rails for last-mile, competition and liquidity. Liquidity in these corridors can only be built using local-currency settlement. Regional settlement efforts in Africa are specifically trying to solve this problem. For the last mile, expanding mobile money and account penetration is less within the provider's control and more of a development issue. Wherever mobile money has reached, costs have fallen dramatically. Regarding competition, it is about the ability to handle compliance and banking work at manageable costs. It is easy to infer from this that if there is opacity in regulations, this is harder to solve.

Each of these has an infrastructure play at some level. When the world started moving towards the 3% target, quick progress was only possible as long as there were easy levers. The moment they ran out and had to pull structural levers, progress slowed. This isn't a measure of the industry's efforts, but of how much infrastructure still needs to be built in the markets where it is hardest to build.