Corridors and remittances: money that crosses borders. 6 chapters and a final quiz.

Chapter 1. The $900 billion that changes lives.

A remittance is a small money transfer, typically $200 to $300, that a migrant worker sends to family back home. Taken together, these flows are one of the largest capital movements on the planet. For dozens of countries, they are the leading source of foreign currency.

For developing countries, remittances now exceed foreign direct investment and official development assistance combined. They are also strikingly countercyclical. During the 2020 pandemic, when investment collapsed, diasporas kept sending money, and in many cases sent more.

Relative to the size of the economy, the figures are even more striking. Remittances amount to roughly 45% of GDP in Tajikistan, 38% in Tonga, and 26% in Nicaragua (World Bank orders of magnitude, depending on the year). A corridor is a sending country → receiving country pair: US → Mexico, France → Morocco, UAE → India, and so on. Each corridor has its own players, prices, and habits.

Chapter 2. The true cost of a transfer and the 3% target.

Every quarter, the World Bank measures the cost of sending $200 in its Remittance Prices Worldwide (RPW) database. At the end of 2024, the global average cost was still around 6.5%, or $13 taken out of every $200 sent. That is very far from the international target.

3%: the UN and G20 target

Target 10.c of the UN Sustainable Development Goals aims for an average cost below 3% by 2030 and the elimination of any corridor above 5%. In November 2020, the G20 adopted a roadmap for cross-border payments, led by the FSB and the CPMI. It sets quantified targets, including 75% of retail payments credited within an hour by the end of 2027. For remittances, it aligns with the UN's 3% for 2030.

Chapter 3. The players: from Western Union agents to apps.

The transfer market pits four families of players with radically different models against one another. Three are visible: incumbent operators with agent networks, digital challengers, and banks. The fourth, informal channels, escapes all statistics.

Chapter 4. Mobile money: the last mile.

In 2007, Kenyan operator Safaricom launched M-Pesa, which lets people send money by SMS and withdraw it in cash at the corner store, now turned agent. Twenty years on, mobile money is the de facto banking system across much of Africa and South Asia. It is also the cheapest channel for receiving remittances.

The critical link is the aggregator, a role filled by Thunes, Onafriq (formerly MFS Africa), or TerraPay. They connect hundreds of wallets, banks, and agent networks through a single API. A European app can then credit a Kenyan, Ghanaian, or Bangladeshi wallet without negotiating hundreds of bilateral agreements.

According to the World Bank and the GSMA, mobile money is the cheapest receiving channel (often under 5%, against a global average of 6.5%). It also has a documented inclusion effect: first accounts opened by women and in rural areas, precautionary savings, and greater resilience to shocks.

Chapter 5. The rails: SWIFT gpi, stablecoins, and Project Nexus.

Beneath the apps and agents, money still has to move between countries. Three generations of rails coexist: correspondent banking (upgraded by SWIFT gpi), stablecoins, and direct links between instant payment systems. The BIS's Project Nexus is the most ambitious attempt at the last of these.

Correspondent banking, an aging backbone

Under the pressure of compliance costs, this network is shrinking: the number of active correspondent relationships fell by nearly 30% between 2011 and 2022 (CPMI/BIS). Entire countries are left with degraded access to the dollar. The phenomenon has a name: de-risking.

SWIFT, a Belgian cooperative founded in 1973 with more than 11,500 connected institutions, responded with gpi (global payments innovation, 2017). It brings a unique end-to-end identifier (UETR), parcel-style tracking, and fee transparency. About half of gpi payments are credited in under 30 minutes, and nearly all within 24 hours. Since November 2025, the migration to ISO 20022 has been complete for interbank payments, bringing rich, structured data end to end.

<CdtTrfTxInf>
  <PmtId>
    <EndToEndId>REM-2026-07-000482</EndToEndId>
    <UETR>eb6305c9-1f7f-49de-aed0-16487c27b42d</UETR>
  </PmtId>
  <IntrBkSttlmAmt Ccy="USD">200.00</IntrBkSttlmAmt>
  <ChrgBr>SHAR</ChrgBr>
  <Dbtr><Nm>Fatou N.</Nm></Dbtr>
  <Cdtr><Nm>Awa N.</Nm></Cdtr>
  <RmtInf><Ustrd>Soutien familial juillet</Ustrd></RmtInf>
</CdtTrfTxInf>

Stablecoins: the tokenized dollar enters the corridors

Stablecoins (Tether's USDT, Circle's USDC) passed $250 billion in circulation in 2025. In corridors to Latin America, Africa, and Southeast Asia, they increasingly serve as a wholesale rail: a digital dollar that moves 24/7 in seconds, with no correspondent. Regulation has taken shape, with the MiCA stablecoin regime applying in the EU since June 2024 and the GENIUS Act signed in the US in July 2025.

Project Nexus: linking instant payment systems together

Bilateral links are multiplying: PayNow–PromptPay in 2021, UPI–PayNow in 2023, and more. The BIS Innovation Hub's Project Nexus proposes a multilateral hub instead. Each domestic instant payment system connects to Nexus once and becomes reachable by all the others. Phase 3 ended in 2024 with a decision to go live. The central banks of India, Malaysia, the Philippines, Singapore, and Thailand founded Nexus Global Payments, incorporated in Singapore in 2025. The first payments are targeted for around 2027, with the goal of end-to-end transfers in under 60 seconds.

Chapter 6. Development impact and the future of corridors.

Remittances go straight into households' pockets, with no government intermediary. They pay for food, schooling, healthcare, and housing. World Bank and IMF studies link them to a measurable reduction in poverty and greater resilience to shocks (droughts, crises, pandemics).

De-risking is the flip side. Banks that judge the risk-return trade-off unfavorable close transfer operators' accounts and cut off entire corridors. Somalia, which depends heavily on its diaspora, has been hit by this several times. Too much poorly targeted compliance can push flows back into informal channels, the exact opposite of the intended goal.

To sum up: about $905 billion in flows, an average cost still around 6.5%, a 3% target, and three generations of rails in competition. Remittances are at once a market, critical infrastructure, and a development lever. That triple role makes them one of the most closely watched issues in global payments.