Institute for International Political Economy Berlin Migrant Remittances: Alternative Money Transfer Channels Authors: Martina Metzger, Tim Riedler, Jennifer Pédussel Wu Working Paper, No. 127/2020 Editors: Sigrid Betzelt, Eckhard Hein (lead editor), Martina Metzger, Martina Sproll, Christina Teipen, Markus Wissen, Jennifer Pédussel Wu, Reingard Zimmer Migrant Remittances: Alternative Money Transfer Channels Martina Metzger (
[email protected]), Professor of Monetary Economics, Berlin School of Economics and Law, Institute for International Political Economy Berlin (IPE) Tim Riedler (
[email protected]), HTW University of Applied Sciences Berlin Jennifer Pédussel Wu (
[email protected]), Professor of International Trade and Production, Berlin School of Economics and Law, Institute for International Political Economy Berlin (IPE) Abstract This paper first explores the role of digital financial services, e.g. mobile money systems and cryptocurrency-based systems, and their impact on the choice of migrants to send remittances. Secondly we discuss whether alternative remittances sending channels increase access to financial services for remittance-sending and remittance-receiving households. Africa, and in particularly Kenya, are pioneers in alternative money transfer systems and of tailor-made regulatory initiatives to address digital financial services. Thus, our paper focuses on the technologies of the Kenyan mobile money system, M-Pesa, and the major cryptocurrency, Bitcoin, and based on that takes into account selected experiences of other Sub-Saharan African countries. We find that in comparison to traditional remittances sending channels, mobile money transfer channels are often superior in terms of service-related features as costs of transfers for sending and receiving households, speed of delivery, availability and access to the remittances by receiving households or security of transactions.