Providing better remittance services to rural Africa

General Principle 1: transparency and consumer protection

Remittance senders and receivers should be informed about the condition of the service and all the component of the cost, including the fee, exchange rate applied to the transaction, any other commission that will apply, any tax or other charge.

The partnership between MTO and Post should put both in the position to provide all the necessary information to their customers. Price and conditions should be published at the service location and disclosed to the customer ahead of performing the transaction, as well as with a written receipt after the transaction is completed. This implies that the MTO, who would typically be setting these variables and updating them constantly, provides the Post with direct access to them, so tellers can provide the customers with the relevant information.

The contract between MTO and Post should also specify how complaints will be handled, including provisions that can accommodate the needs of recipients with limited financial literacy, and what dispute resolution mechanism can be used, whether there is a money back guarantee in case of defective execution. The contract should also provide for deadlines for responding to investigation requests of the receiving post office in case of a problem.

General Principle 2: payment system infrastructure

Agreements with MTOs should not prevent the Post from fully exploiting the existing payment system infrastructure to deliver remittances. On the contrary, this should be encouraged to the extent possible.

Improvements in transaction infrastructures, including ATMs and POS terminals can be achieved through the adoption of internationally agreed standards for instruments, the adoption of common equipment and software standards to allow interoperability at point of sale among competing networks and facilitation of interconnectivity among the proprietary networks for handling transactions. Greater automation may be able to reduce costs and provide improved services to users.

The safety and efficiency of cross-border remittances may be further improved by the coordination and/or adoption across the relevant payment systems of, for example, communication standards and payment message formats that facilitate greater interoperability as well as rules, procedures and operating hours that support straight through processing.

General Principle 3: legal and regulatory environment

Remittance services should be supported by a sound, predictable, non-discriminatory and proportionate legal and regulatory framework in relevant jurisdictions. As a provider of remittance service, the Post should bring any shortcoming in the laws and regulation to the attention of the regulators and keep an open dialogue with the relevant authorities to ensure compliance with the law.

In some cases, the industry may develop codes of conduct or self-regulatory regimes that are as effective – or possibly more effective – than formal regulation. In these cases, the Post should be actively involved in these efforts.