Finance investment

Payment Rails Upgrade Cuts Remittance Costs for Migrant Workers

Next-Gen Payment Rails Slash Remittance Costs for Migrant Workers, Saving Billions

Migrant workers sent more than USD 860 billion in cross-border remittances this year, yet legacy banking rails still siphon off as much as 10 % of every transaction through layered fees, FX mark-ups and correspondent-bank charges. A wave of infrastructure upgrades—anchored by real-time settlement networks, ISO 20022 messaging and Bitcoin’s Lightning Network—has now pushed the average global cost of sending USD 200 to 1.9 %, according to data released today by Resolve, a payments-research group. The figure is the lowest on record and sits well below the United Nations Sustainable Development Goal of 3 % by 2030.

“Cutting remittance costs by more than two-thirds in under three years is not a marketing claim—it is a measurable shift in how value moves,” said Laura Kim, Chief Executive of Resolve. “Migrants no longer have to subsidize an antiquated correspondent-banking system; they can move money the way data moves on the internet—fast, cheap and transparent.”

The savings are most pronounced in Sub-Saharan Africa, historically the planet’s costliest corridor. World Bank figures for Q-3 2025 show that digital-first providers operating on new rails now charge 2.97 % on average, compared with 15.97 % levied by banks still using SWIFT.

In corridor-specific pilots, Lightning-based settlements have reduced fees by up to 97 % while delivering funds in seconds instead of days.

The World Bank estimates that every percentage-point decrease in remittance cost leaves an extra USD 8.6 billion annually in workers’ pockets—money that, according to IMF research, raises household food security and school attendance in receiving countries.

“When my members send AED 1,000 home to Lagos, they used to lose the equivalent of two days’ wages in fees,” said Ahmed Rahim, General Secretary of the UAE Construction Workers Federation. “This year the same transfer costs less than a cup of coffee—and their families get the money before dinner.”

Market traction is accelerating. In the first nine months of 2025, fintechs that have migrated to next-gen payment rails captured 38 % of global remittance volume, up from 17 % in 2022, according to the Bank for International Settlements.

Mobile-money operators in Kenya, Ghana and the Philippines now on-board new users directly onto Lightning wallets, bypassing traditional bank accounts and eliminating FX spreads. Meanwhile, the Federal Reserve’s rollout of ISO 20022 in March 2025 has added richer remittance data, cutting compliance-related rejection rates by 27 % and further lowering cost.

Resolve, which open-sources quarterly cost data across 97 corridors, projects that consumer-level fees will fall to 1.2 % by late 2026 as competition intensifies. Analysts caution that regulatory fragmentation and de-risking by global banks could still slow progress, but early-mover remittance firms are already locking in market share. “Cost is only half the story—real-time certainty means families can plan medical bills or farm inputs the same day,” Kim added. “That velocity is reshaping rural economies faster than any development grant.”

About Resolve

Resolve is a San Francisco–based payments-analytics company that benchmarks retail pricing on emerging payment rails. Its Remittance Cost Index is cited by the IMF, USAID and the UN’s International Organization for Migration.