February 17, 2026 · 15 min read

The $48 Billion Problem: How Remittance Fees Steal From Workers

Every year, 200 million migrant workers send $700 billion home to their families. And every year, traditional money transfer companies like Western Union and MoneyGram take $48 billion of it in fees. That's 6.8% of every dollar earned through hard work — gone.

Imagine working 12-hour days in construction, cleaning offices at night, or caring for elderly patients. You're earning money thousands of miles from home, missing your kids' birthdays, your parents' aging years, the everyday moments that make life meaningful. You're doing this for one reason: to send money home.

And then Western Union takes 7% of it.

Not 7% of your profits. Not 7% of what you can spare. Seven percent of the money itself. If you send $500 home to Manila, $35 disappears before it even leaves the country. That's highway robbery, and it's happening 200 million times a year.

$48 Billion

Lost to remittance fees annually. That's more than the GDP of 100+ countries. That's enough to fund schools, hospitals, clean water, and infrastructure for millions of families. Instead, it's profit for middlemen who add almost no value.

The World Bank Data: A Global Shakedown

According to the World Bank's Remittance Prices Worldwide Database (Q4 2025), the global average cost of sending $200 across borders is 6.8%. That's the average. In some corridors, it's worse:

Corridor Average Fee Cost to Send $500
US → Mexico 5.5% $27.50
US → Philippines 6.2% $31.00
US → Kenya 7.9% $39.50
US → India 5.8% $29.00
Sub-Saharan Africa (regional) 8.4% $42.00

These aren't just numbers. These are real dollars taken from real families. A nurse in Houston sending $500 home to her mother in Lagos loses $42. A construction worker in Dubai sending money to Pakistan loses $35. A farm worker in California sending to Guatemala loses $30.

Multiply that by 200 million workers sending money monthly, and you get $48 billion a year. Gone.

The Hidden Fees: It's Worse Than You Think

That 6.8% average? It's only the visible fee. The actual cost is higher because of exchange rate markups — a hidden fee that most people don't even notice.

Here's how it works: When you send $500 USD to Mexico, Western Union doesn't just charge you a $27 transfer fee. They also give you a worse exchange rate than the market rate. Let's say the real exchange rate is 20 pesos per dollar. Western Union might give you 19.2 pesos per dollar — a 4% markup.

So your $500 transfer actually costs:

The exchange rate markup is brilliant (for them) because most customers don't even realize it's happening. They see the $27.50 fee and think, "That's expensive but manageable." They don't realize another $20 was silently skimmed off the top.

"The poorest pay the most. The people who can least afford fees are charged the highest rates. Sub-Saharan Africa, one of the world's poorest regions, has the highest remittance costs at 8.4%. This isn't market inefficiency — it's extraction."

Why Are Fees So High?

Traditional remittance companies justify their fees by pointing to "infrastructure costs" and "regulatory compliance." Let's be honest about what that means:

1. Physical Locations

Western Union and MoneyGram have physical storefronts in thousands of cities. Rent, staff, utilities — all expensive. But here's the thing: you don't need physical locations to move money in 2026. That's a business model from 1871 (when Western Union was founded). We have the internet now.

2. Correspondent Banking

Traditional remittance relies on a chain of banks passing money between countries. Each bank takes a cut. The process takes 1-5 days because it's literally passing through multiple institutions, each with their own settlement times and fees.

3. Currency Conversion

Converting USD to pesos, rupees, or naira involves forex markets, spreads, and middlemen. Traditional systems use this complexity to hide markup fees that customers don't understand.

4. Lack of Competition

In many corridors, Western Union and MoneyGram are the only options. When you have a near-monopoly, you can charge whatever you want. Customers have no leverage. You either pay the 7% fee or don't send money home. That's not a choice.

5. Regulatory Compliance

This is the legitimate cost. Anti-money laundering (AML) and know-your-customer (KYC) regulations require identity verification, transaction monitoring, and reporting. This is important for preventing crime, and it does cost money. But it doesn't cost $48 billion a year.

The Human Impact: What $48 Billion Really Means

Numbers are abstract. Let's make this concrete.

Maria works as a housekeeper in Los Angeles. She sends $400 home to her mother in Guatemala every month to cover rent, food, and her younger brother's school fees. Western Union charges her $28 per transfer. That's $336 per year in fees — money that could have bought school uniforms, textbooks, or medicine. Instead, it's profit for Western Union.

Ahmed is a construction worker in Dubai. He sends $600 home to Pakistan monthly to support his wife and three kids. His remittance provider charges 6.5% + exchange rate markup = 10% total. He loses $60 per transfer, or $720 per year. That's a month of groceries. Gone.

Grace is a nurse in London. She sends £500 to her family in Kenya every two months. At 7.9% fees, she loses £39.50 per transfer, or £237 per year. That could have been school fees for her niece. Instead, it's corporate revenue.

Multiply these stories by 200 million, and you understand the scale of the problem. This isn't a theoretical economic issue. It's billions of dollars taken from the people who can least afford to lose it.

$440

Average annual loss per migrant worker in remittance fees (based on $500/month transfers at 6.8% avg fee). For many workers, that's a full week's wages.

The Blockchain Solution: How Stablecoins Change Everything

Now imagine a different system. A system where:

That's what stablecoin remittance on the XRP Ledger offers.

Here's the math: If Maria switched from Western Union to RemitDLT (XRPL stablecoin remittance), her $400 monthly transfer would cost $0.99 instead of $28. That saves her $324 per year. That's real money. That's rent for a month. That's a plane ticket home to see her family.

If all 200 million migrant workers switched from traditional remittance to stablecoin remittance, they would collectively save over $40 billion per year. That money stays in the hands of workers and their families instead of going to Western Union shareholders.

Why XRPL?

You might be thinking: "Sure, blockchain is fast and cheap, but isn't it complicated? My mom in Manila doesn't understand crypto."

That's the right question. And that's why user experience matters. RemitDLT is built on XRPL specifically because it solves the problems that make other blockchains unusable for remittance:

Your mom in Manila doesn't need to understand blockchain any more than she needs to understand SWIFT or ACH to receive a bank transfer. She just needs an app that says "You received $400 from Maria." That's it. The blockchain runs invisibly in the background.

The Last Mile Problem (Being Honest)

Here's the part where most crypto projects lie to you: They promise "instant global payments" and ignore the fact that converting stablecoins to local currency is still friction.

We're not going to lie. If your recipient wants pesos, naira, or rupees in their bank account, there's still a "last mile" problem. They need to convert USDC to local currency, and that requires either:

  1. A local exchange or money changer
  2. Peer-to-peer conversion
  3. A partner service (like a mobile money provider) that accepts stablecoins

The good news: This infrastructure is being built RIGHT NOW. In the Philippines, you can cash out USDC at thousands of locations. In Mexico, mobile money services are integrating stablecoins. In Kenya, M-Pesa is exploring USDC settlement. In India, peer-to-peer stablecoin markets are thriving.

RemitDLT is working with local off-ramp partners to make cash-out seamless. But even today, for families who CAN hold stablecoins (to spend later, save, or convert locally), RemitDLT is already cheaper and faster than Western Union.

The Future: A World Without Remittance Fees

Imagine a world where sending money home costs the same as sending an email: basically free.

That world is possible. The technology exists. XRPL can handle 1,500 transactions per second. Stablecoins are proven. Wallets are easy to use. The only thing standing in the way is adoption.

The question is: Will migrant workers keep paying 7% to Western Union because "that's how it's always been done"? Or will they embrace a system that treats them fairly?

$48 billion a year is on the line. That's not just money. That's school fees. Medical bills. Business capital. Emergency savings. Dreams. Futures.

It's time to stop letting middlemen steal from workers. It's time to use technology that serves people, not profits.

Try RemitDLT: Cross-Border Remittance for $0.99

Send money home in seconds, not days. XRPL stablecoin remittance without the Western Union robbery.

Send Money Now

References & Data Sources

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