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<p>In May, the UK and Swiss Governments, with the support of the World Bank and other
partners, launched a global Call to Action on remittances. This called on policymakers,
regulators and remittance service providers to take action to keep remittances flowing
during the crisis.</p><p>The Government has taken steps to support remittance service
providers in the UK, including enabling them to remain open through lockdown by including
them on the list of essential businesses.</p><p>Remittance prices are high for many
reasons, including underdeveloped financial infrastructure in some countries, limited
competition, regulatory obstacles, lack of access to the banking sector by remittance
senders and/or receivers, and difficulties for migrants to obtain the necessary identification
documentation to enter the financial mainstream.</p><p>The Government recognises that
transparency is an important factor leading to high remittances prices. We are working
to improve price transparency for consumers with the Treasury, the FCA and the industry.</p><p>In
the remittances market, the total cost might not always be clear to customers as there
are a number of variable factors including: the transaction fee, the exchange rate
applied and the margin and speed of the service. We are working on ways to support
increasing transparency of data so it is clear for the remitter and receiver how the
total cost is calculated.</p><p>The World Bank Remittances Prices Worldwide (RPW)
reports uses example transactions of $200 and $500 to illustrate the overall charge
for sending this money in percentage terms. However, capturing this cost can be challenging
as some costs can be hidden, especially where host country’s currencies are not directly
convertible into the recipient’s country’s currency.</p><p>The World Bank methodology
uses the inter-bank rate that is published by central banks as a reference point and
this is generally a reliable data point for exchange rates. However, some countries
have multiple exchange range windows which may not be captured by the inter-bank rates.</p><p>We
find the World Bank’s methodology adequate and their data informative, however we
recognise that some remittance service providers do not consider this an accurate
representation of their charges. This could be due to several factors. We are working
with the industry to improve data accuracy.</p>
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