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Migrants’ Choice of Remittance Channel: Do General Payment Habits Play a Role?

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  • Kosse, Anneke
  • Vermeulen, Robert

Abstract

This paper investigates the determinants in migrants’ choice of payment channel when transferring money to relatives abroad. We analyze survey results on 501 migrants in the Netherlands, identifying five remittance channels: bank, money transfer operator, in-cash transfers via informal intermediaries, ATM withdrawals abroad, and carrying cash abroad. The results show that education, costs, access, and financial development in the recipient country are important determinants, while general cash preferences and internet banking usage play a limited role. Based on our findings, financial education, cost reduction, and increasing financial inclusion may serve a valuable role to increase the use of formal channels.

Suggested Citation

  • Kosse, Anneke & Vermeulen, Robert, 2014. "Migrants’ Choice of Remittance Channel: Do General Payment Habits Play a Role?," World Development, Elsevier, vol. 62(C), pages 213-227.
  • Handle: RePEc:eee:wdevel:v:62:y:2014:i:c:p:213-227
    DOI: 10.1016/j.worlddev.2014.05.002
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    Cited by:

    1. repec:eco:journ1:2017-02-27 is not listed on IDEAS
    2. Tamás Ilyés & Lóránt Varga, 2015. "A General Equilibrium Approach of Retail Payments," MNB Working Papers 2015/3, Magyar Nemzeti Bank (Central Bank of Hungary).
    3. Koji Kubo, 2015. "Evolving Informal Remittance Methods of Myanmar Migrant Workers in Thailand," Working Papers DP-2015-45, Economic Research Institute for ASEAN and East Asia (ERIA).
    4. Christian Ambrosius, 2016. "Remittances and Financial Access: Is There Really a Link and for Whom? Evidence from Mexican Household Data," The World Economy, Wiley Blackwell, vol. 39(7), pages 964-982, July.
    5. Zhu, Heng, 2016. "Remittance frequency, transaction fees and household impacts," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235561, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    remittances; payment instruments; qualitative choice models;

    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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