The Bank of International Settlements’ Committee on Payment and Settlement Systems and the World Bank issued a report today setting out general principles for international remittance services.

The CPSS-World Bank report provides an analysis of the payment system aspects of remittances, and it sets out general principles designed to assist countries that are seeking to improve the market for remittance services.

The report contains five general principles: transparency and consumer protection; payment system infrastructure; the legal and regulatory framework; market structure and competition; and governance and risk management. The report also highlights the roles of both public authorities and remittance service providers in implementing the general principles.

The BIS notes that the flow of funds from migrant workers back to their families in their home country is an important source of income in many developing economies. The total value of these remittances has been increasing steadily over the past decade and it is estimated that in 2005 the total value worldwide was over US$230 billion, involving some 175 million migrants.

However, remittances can be expensive relative to the often low incomes of migrant workers and to the rather small amounts sent (typically no more than a few hundred dollars or its equivalent at a time). Moreover, it may not be easy for migrants to access remittance services if they do not speak the local language or do not have the necessary documentation, while the relatively undeveloped financial infrastructure in some countries may make it difficult for recipients to collect the remittances. In some cases, the services are unreliable, particularly as regards the time taken for the funds to be transferred. In addition, some markets are uncompetitive or have regulatory barriers to the provision of remittance services.