Various banks and other financial institutions want to do something regarding the war in Ukraine. As a result, a new joint statement with the EC was released to lower remittance fees. The lower fees will remain in place for the duration of the war, and the proposal notes support from all industry giants.
Cheaper Remittance To Ukraine
Many people want to send money to Ukraine during this time of war. They either have family there or like to support the cause through financial means. Unfortunately, it has always been relatively expensive to use remittance services, regardless of where funds end up. That will change following the joint statement to bring down remittance fees to Ukraine during the war.
As the war with Russia continues, remittances play a bigger role of importance in Ukraine. The World Bank expects a 22% jump in money flows to the Eastern European country for 2022. As such, it prompted all financial institutions and service providers to come up with a new plan. By lowering the fees, there is a benefit to the Ukrainian GDP. Moreover, it makes sending money to the country more straightforward without incurring high costs.
Mairead McGuinness explains:
“Finding practical solutions to help Ukrainians living abroad, many forced to flee as a consequence of the war, to send remittances to their loved ones at home is a very concrete example of our solidarity. I welcome that EU and Ukrainian companies active in remittances have come together to achieve this objective. We are open to, and in fact would welcome, more providers joining the statement for affordable, accessible and transparent remittance services to Ukraine.”
How Can Financial Institutions Lower Fees?
- They can offer discounts for customers who send money frequently.
- They can negotiate better rates with the companies they partner with to send money.
- They can pass on some of the savings they receive from technology improvements to their customers.
- They can offer special promotions or deals on certain transfer amounts.
In this case, the signatories – including Visa, Wise, Mastercard, TransferGo, etc. – commit to bringing their fees down to 3% over time. Additionally, they will continue to develop their digital services further to make these transfers more accessible.