A migrant worker sending $200 home pays an average of $12.72 for the transaction. This figure corresponds to the global average transfer cost of 6.36% recorded in 2025 in the World Bank’s “Remittance Prices Worldwide” database, which serves as the source for the official UN indicator on remittance costs. These funds go toward fees and currency exchange rate margins, thereby reducing the amounts families rely on.
The sums involved are substantial. According to World Bank data, low- and middle-income countries received approximately $704 billion in private remittances in 2025. Under Sustainable Development Goal target 10.c, governments have committed to reducing the cost of such transfers to below 3% by 2030 and eliminating corridors where the cost exceeds 5%. With four years remaining until 2030, the global average remains more than double the target figure.
A target drifting out of reach
Costs are declining, but slowly. The global average stood at 9.3% in 2011 and 7.52% in 2015, the year the relevant targets were adopted. By 2025, it had reached 6.36%, following a rise to 6.62% the previous year (2024).
Between 2015 and 2025, the average figure fell by 1.16 percentage points. We estimate that if this pace continues, the rate will still be around 5.8% by 2030. Dropping below 3% would require a reduction of approximately 3.4 points over five years, nearly three times the rate of decline observed over the past decade.
The Financial Stability Board, which monitors the G20 program to make cross-border payments faster and cheaper, reached a similar conclusion in October 2025. Its progress report noted that the global average cost of remittances shows “persistence” (a resistance to falling) and indicated that achieving satisfactory global results by the 2027 deadline is unlikely.
To illustrate the scale of the issue: a one-percentage-point change on a flow of funds totaling approximately $700 billion is equivalent to about $7 billion annually. The actual figure differs because the 6.36% average is calculated based on a $200 transfer amount, whereas many transfers exceed this sum, but the order of magnitude is clear.
The channel matters more than the corridor
The method of sending funds significantly affects the cost of the service. World Bank data for the first quarter of 2025, cited in the GSMA’s State of the Industry Report on Mobile Money 2026, show the following average figures for a transfer of 200 US dollars.
| Method | Average cost of sending US$200, Q1 2025 |
| Mobile money | 3.63% |
| Debit or credit card | 4.68% |
| Cash | 6.92% |
| Bank account transfer | 8.81% |
The cost of mobile money transfer services is now only slightly above the 3% target (a difference of less than one percentage point). Bank account transfers cost nearly two and a half times more.
This is partly due to what is included in the service cost. The UN metric accounts for both the fee charged to the sender and the spread between the exchange rate offered to the client and the interbank rate. A service is considered transparent only if the sender can see both components. Even with a low advertised fee, a transfer can end up being expensive if an unfavorable exchange rate is applied.
The popularity of mobile channels is also growing. According to GSMA data, the volume of international money transfers made via mobile money services reached $45 billion in 2025 (a 23% increase year-on-year), with the number of transactions totaling 381 million. The growth rate of the number of transactions outpaced the growth of their total value, resulting in a decrease in the average transfer amount: approximately $118 in 2025 compared to $137 in 2021. The smaller the transfer amount, the more significant the impact of a fixed fee.
Why the last mile stays expensive
Geography still matters. According to the same World Bank data, sending $200 to sub-Saharan Africa in early 2025 cost an average of 8.78%, the highest rate among all regions, compared to 4.80% for South Asia. The GSMA notes that the greatest benefits have been seen on corridors from developed nations to low- and middle-income countries, whereas South-South and intra-regional routes, particularly within Africa—remain less digitized and more expensive.
The same report outlines the obstacles. Licensing and “Know Your Customer” (KYC) rules vary by country, foreign exchange regulations can be restrictive, and compliance with anti-money laundering rules is inconsistent. Many national payment switches were built for domestic use and cannot easily interconnect across borders, while some central banks mandate that cross-border transfers pass through banks, driving up costs and causing delays. Mobile money providers surveyed by the GSMA cited cross-border data regulations as their biggest regulatory challenge.
Banks have also retrenched. A Bank for International Settlements (BIS) bulletin published in May 2024 found that the number of active correspondent banks and corridors declined between 2011 and 2022, with banks citing compliance risks, particularly in countries with weaker governance, as the primary reason. Fewer correspondent relationships can mean fewer routes into a country and less competition on the remaining ones.
Taxes add to the cost. Starting in January 2026, a 1% excise tax will be levied in the US on certain money transfers. According to the IRS, this applies when the sender pays using cash, a money order, a cashier’s check, or a similar physical instrument; consequently, the additional cost falls on those sending cash. The GSM Association describes taxes on mobile money transactions as regressive and counterproductive, as they hit low-income households the hardest.
What is already working
One practical solution involves linking national instant payment systems. Singapore’s PayNow and India’s Unified Payments Interface (UPI) have been interconnected since February 2023; according to the Reserve Bank of India, peer-to-peer transfers between these systems can be completed in less than a minute.
Project Nexus, developed by the Bank for International Settlements (BIS) Innovation Hub, links multiple domestic instant payment systems based on a unified standard. The project aims to ensure that most cross-border payments reach the recipient within 60 seconds. In 2025, the BIS handed the project over to Nexus Global Payments, an entity established by the central banks of several countries (including India, Malaysia, the Philippines, Singapore, and Thailand), which is now working on its practical implementation.
Africa is also developing its own interoperability mechanisms. The Pan-African Payment and Settlement System (PAPSS), launched by Afreximbank, enables real-time transactions in African currencies without the need for offshore clearing, although its adoption rate remains modest. In 2025, Ghana and Rwanda announced plans to link their national payment systems and launch a pilot project for the mutual recognition of licenses (passporting) for fintech companies; this allows a firm authorized to operate in one country to also operate in the other with minimal additional approval procedures.
Interoperability between mobile wallets and bank accounts is also improving. According to the GSMA, the volume of transfers from bank accounts to mobile payment service accounts reached $167 billion in 2025, while transfers in the opposite direction totaled $163 billion. In both cases, the figures rose by more than a third compared to 2024.
The potential audience for such services is substantial. According to the World Bank’s Global Findex 2025 study, 1.3 billion adults still lack a bank account, yet approximately 900 million of them use mobile phones (including 530 million who use smartphones). Women still lag behind in this regard: 77% of women have an account, compared to 81% of men.
What remittance providers and fintech builders should get right
Policy sets the rules, but the price a family pays is also shaped by product design. For banks, money transfer operators, mobile money providers and fintechs building remittance services, the evidence above points to six priorities.
- Show the full price before the sender confirms. Display the fee and the exchange rate together. This is what the UN indicator treats as a transparent service.
- Connect to where the money arrives. APIs to mobile wallets and instant payment systems in receiving countries, not only to bank accounts, open up the cheaper channels in the table above.
- Use tiered digital KYC. Simpler checks for small, low-risk transfers and stronger checks for larger amounts can let people with a phone but no banking history start sending, within the rules of both countries.
- Build in real-time fraud monitoring. More than a quarter of mobile money providers in the GSMA survey said consumer and agent fraud had the greatest financial impact on customers. Cheap channels only help if people trust them.
- Design for basic phones and cash-out. By our calculation from Findex data, about 370 million unbanked adults with a phone do not have a smartphone, and agents handled US$430 billion in mobile money cash-ins in 2025. An app-only service will miss many recipients.
- Decide where data is stored from day one. Cross-border data rules are the biggest regulatory challenge providers report, so data storage and sharing belong in the architecture, not in a later fix.
These are engineering decisions as much as business ones. Whether a service is built by a bank’s own engineers or by a fintech software development company, they are easier to get right at the design stage than to retrofit later.
Closing the gap
For some channels, the 3% target is already well within reach. The challenge lies in the fact that the least expensive channels do not yet reach everyone; left out are people who prefer cash transactions, families relying on costly transfer corridors between developing countries (“South-South”), and hundreds of millions of adults who own a mobile phone but lack a bank account.
Achieving this goal by 2030 will require concerted efforts in policy and technology: harmonizing cross-border Know Your Customer (KYC) and licensing regulations; structuring transaction taxes so they do not place a heavy burden on low-income senders; and integrating instant payment systems while introducing products that disclose the full cost of a transfer upfront. Reducing service costs by even a single percentage point allows families who depend on these remittances to retain more of their funds.
