2019-04-09
The cost of cross-border payments needs to drop
Sending money across borders costs too much
原文来源：The Economist 2019-4-13
Article
FOR MOST of human history, sending money across borders has cost the earth. Thankfully for globetrotters and e-shoppers in the rich world, that has changed in the past decade. A shift from cash and travellers’ cheques towards digital payments has cut the cost of moving funds around. And a new generation of fintech firms has broken the stranglehold that big banks used to have on money transfers (see article). As a result, fees have fallen. The cost of a transfer between consumers or small firms who are both in G7 countries can now cost 2% or less. This year some $10trn will pass across borders. As prices fall further, the sums will grow.
Yet one corner of this industry remains trapped in a dusty time warp: remittances, or the practice of foreign workers sending money to relatives back home. There the costs are still sky high, at about 7%. That matters. The sums involved are vast—$550bn of remittances will go to developing countries this year, more than all the capital they receive as investment from multinational companies, says the World Bank. There are 266m migrants, who often send money home. Many of them are poor, and so are almost all their relatives.
Remittances cost the earth for several reasons. Typically at least one leg of the journey still involves physical cash—either in the “first mile”, when a construction worker or waiter hands over hard-earned banknotes to a specialist transfer firm or to a bank, or the “last mile” on the other side of the world, when the cash is handed over to their families, who lack bank accounts. These vast networks are expensive to maintain—Western Union, a 168-year-old transfer firm, is able to send cash to, or pick it up from, over half a million physical sites around the world.
High fees also reflect anti-competitive behaviour and a growing thicket of Western money-laundering rules which are meant to police al-Qaeda barons, but which have ended up being a nightmare for expatriate Filipina maids. In combination, these two forces are strangling new entrants. Between 2011 and 2015, when the industry saw a brief flurry of startups, average remittance fees fell by 17%. But in 2016 the number of startup launches fell by half compared with the year before. Fees have since levelled off.
To prod remittances into the 21st century, two things need to happen. In the short term governments in the developing world need to help unleash competition. Sometimes the big firms that dominate cash transfers, such as MoneyGram and Western Union, have exclusive partnerships with state-run bodies that have a dominant role in the first or last mile. For example, post offices that receive payments are often contractually committed to using a single transfer firm. Deals that lock out rivals should be banned. Governments in the rich world need to devise their money-laundering rules with competition in mind. Simple adjustments could lower the burden of compliance that startups face. For example, fintechs could be required to track every 20th transaction falling below a defined threshold, instead of every last one of them.
In the long run the answer to the remittances puzzle is a shift away from expensive cash-based systems and a bypassing of banks and transfer firms altogether. This could yet happen. Across Africa, Asia and Latin America hundreds of millions of people are using e-commerce and transport applications on mobile phones that typically have payment systems and digital wallets, too. Entrepreneurs and tech firms are working out how to stitch all these local networks together. In time, perhaps, sending $200 from the rich world to the emerging one will cost almost nothing and the payments revolution will be complete.
Notes
FOR MOST of human history
纵观大部分人类历史
A shift from cash and travellers’ cheques towards digital payments has cut the cost of moving funds around.
A shift from A towards B，由A到B的转变
broken the stranglehold
打破压制与束缚
As a result, fees have fallen.
费用降低了
Yet one corner of this industry
a difficult situation 困境；窘境
to back/ drive/ force sb into a corner
把某人逼入困境
are still sky high
sky的用法
Remittances cost the earth for several reasons.
比喻花费巨大，花费了整个地球
a construction worker
建筑工人
Fees have since levelled off.
level 'off/ 'out
1 to stop rising or falling and remain horizontal （停止升降而）保持水平
The plane levelled off at 1 500 feet.
飞机在 1 500 英尺的高空保持水平飞行。
After the long hill, the road levelled out.
过了漫长的山路后，道路就变得平坦了。2 to stay at a steady level of development or progress after a period of sharp rises or falls （经过急剧的涨落后）保持平稳发展
Sales have levelled off after a period of rapid growth.
销售经过一段时间的快速增长后呈稳定状态。
help unleash competition
释放竞争，就是不限制竞争
post offices that receive payments are often contractually committed to using a single transfer firm.
合同要求承诺只使用一家转账公司
Deals that lock out rivals should be banned.
to keep someone out of a place by locking the door
devise their money-laundering rules
设计反洗钱规则
a shift away from expensive cash-based systems and a bypassing of banks and transfer firms altogether.
一种转变，远离。。。；绕过银行和转账公司
This could yet happen.
could, might, may, etc. yet do sth： used to say that sth could, might, etc. happen in the future, even though it seems unlikely （表示将来可能发生，尽管现在似乎没有可能）早晚，总有一天
We may win yet.
我们迟早会赢的。
(formal) She could yet surprise us all.
总有一天，她会让我们都大吃一惊。
how to stitch all these local networks together.
缝合
