Remittances are among Jamaica's largest sources of foreign exchange — money sent home by the diaspora that flows directly into household budgets, often the households that need it most. But every one of those transfers pays a fee, and across billions of dollars a year, the aggregate paid in transfer fees is substantial. That fee is, in effect, a private levy on the poorest financial flow in the economy — money moving from a working relative abroad to a family at home.
A percentage point shaved off the average remittance fee returns real money to Jamaican households at no cost to the Treasury. The fee is high not because moving money is expensive — the underlying cost has fallen sharply with technology — but because the remittance market is concentrated, opaque about true costs, and structured so that the sender rarely compares prices. Each of these is addressable.
This paper measures the remittance fee as an aggregate levy on Jamaican households, identifies why it stays higher than the cost of the service justifies, and offers three recommendations to the Bank of Jamaica and the Ministry of Finance for reducing it — putting money back in Jamaican pockets without spending a dollar of public funds.
Remittances are unusual among large financial flows in who bears their cost. The fee is paid, directly or indirectly, by a diaspora worker sending money to family and by the family receiving it — not by an institution or an investor, but by ordinary people at both ends of a lifeline. A high remittance fee is therefore one of the most regressive charges in the economy: it falls hardest, per dollar, on the households with the least.
Because the flow is so large, even a small average fee aggregates to a substantial sum leaving Jamaican households every year. Reducing the average fee is a direct transfer back to those households — and unlike almost any other pro-poor policy, it costs the government nothing, because the money is not the state's to spend or forgo. It is simply a cost that a better-functioning market would not impose.
Jamaica's remittance fees stay higher than the true cost of transfer because the market that sets them is concentrated among a few dominant providers, opaque about the total cost of a transfer (fees plus the exchange-rate margin), and structured so that senders rarely compare the full price across providers. Where cost is hidden and competition is thin, price stays above cost — and the difference is paid by families.
The true cost of a remittance is the fee plus the margin built into the exchange rate, and the second is usually larger and less visible than the first. Requiring providers to disclose the total cost of a transfer — the amount that actually arrives per dollar sent — lets senders compare on the number that matters and pushes the market toward the cheapest honest price.
Concentration keeps fees high. Enabling more providers — including digital and fintech channels that operate at lower cost — to compete for Jamaican remittance flows increases the pressure on price. The cheapest transfer technologies already exist; the task is to let them reach the Jamaican corridor.
When senders cannot easily compare providers, the market does not discipline price. A trusted, public comparison of the total cost of sending money to Jamaica across providers turns an opaque market into a transparent one, and a transparent market drives fees toward cost.
The Bank of Jamaica should require remittance providers to disclose the total cost of a transfer — fee plus exchange-rate margin, expressed as the amount received per dollar sent — so senders compare on true cost and the hidden margin is brought into the light.
The Bank of Jamaica should enable qualified new and digital providers to compete for Jamaican remittance flows within a sound regulatory perimeter, increasing competition in a concentrated market and pressing fees toward the falling true cost of transfer.
The Ministry of Finance and the Bank of Jamaica should support a trusted public comparison of the total cost of sending money to Jamaica across providers, giving senders the information a competitive market requires and turning transparency into lower fees.
Remittances are a lifeline, and the fee charged on them is a regressive levy on the households least able to bear it. That fee stays above the true, falling cost of moving money because the market is concentrated, opaque about total cost, and hard for senders to shop. None of those conditions is a law of nature; each can be changed by disclosure, competition, and comparison.
Shaving the average remittance fee returns real money to Jamaican families directly, at no cost to the public purse — one of the few pro-poor policies that spends nothing and helps immediately. Human Intelligence LLC is prepared to support the Bank of Jamaica and the Ministry of Finance in measuring the aggregate fee burden and designing the transparency and comparison infrastructure that would shrink it.