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Abstract
Remittances to developing economies constitute one of their most important and consistent forms of capital inflow, but have long been limited by costs and risks associated with trans-border payments. New digital platforms lower these, with significant implications for financial inclusion and economic development. Constituting an important element of developing countries’ engagement with international finance, remittances engender new opportunities for empowerment and vulnerability. This article analyzes recent developments in international remittances to developing countries through the lens of infrastructure. The infrastructural perspective reveals important junction points between diverse money transfer pathways and institutions, depicting their spatial configuration and relationality as well as their potential to affect power differentials, and allowing for a socially embedded view of digital disruption. Drawing on examples in Africa and Asia, we show that the new generation of remittance infrastructures are best understood as assemblages of multiple elements, conjoining monopolistic trunks that depend on local innovations to traverse the ‘last mile’ to reach end-users. The vibrancy and indispensability of local networks and innovation, along with competition among core platforms, allow for significant agency and economic opportunity even among communities beset by poverty.
Acknowledgements
We would like to thank the special issue editors Nicholas Bernards and Malcolm Campbell-Verduyn for their valuable guidance, as well as the participants of the conference ‘The Changing Technological Infrastructures of Global Finance’ (Balsillie School of International Affairs, University of Waterloo, May 2017), the International Studies Association Annual Convention panel ‘The International Political Economy of Bitcoin and Blockchain Technologies’ (San Francisco, April 2018), and the panel ‘African Cities and Mobile Financial Technologies: Exploring Local Ecosystems of Innovation’ at the European Conference on African Studies (Basel, June 2017), for creating propitious fora for discussions. We also thank our anonymous reviewers for their insightful and constructive comments.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes
2 Ndung’u (Citation2018).
3 Several terms used in the payments industry (e.g. rails, interchange fees, etc.) originate from transit engineering (Maurer 2012). Payments innovation metaphors often go back to the ‘19th century Western expansion’ of the U.S., symbolizing new opportunities as well as ‘unsettling’ of old solidarities and conventions, as indicated by Maurer and Swartz, 2015, accessed in https://github.com/DigitalPublishingToolkit/Money-Lab-Reader/blob/master/md/5_1-Maurer-Swartz.md.
4 In this article, we use Kenya and Tanzania as our primary examples because of the extensive degree of information and detailed ethnography available on local adaptation in the remittance space, but also note parallels elsewhere.
5 Because pricing depends on country, town, size of remittance, and whether the transaction is in person or to an account, it is difficult to offer a meaningful quantitative summary. It is further complicated by the fact that banks and money transfer companies also make money on the exchange rate they use, in addition to the stated fee.
7 Zetterli, P. Tanzania: Africa’s Other Mobile Money Juggernaut. GCAP blog, 17 March 2015.
9 While mobile money is relatively widespread in East Africa, its uptake has been slower in the Western part of the continent. The growing engagement in Africa with foreign digital payment and e-commerce platforms – such as Chinese Alipay or WeChat Pay – poses novel concerns for customer privacy with lacking data protection laws in many African states, and regulatory hurdles with accommodating these offshore payment providers (ibid.).
10 Chu 2018; https://support.coins.ph/hc/en-us/articles/201322620-Which-cash-in-methods-are-available-; https://bitspark.io/
11 The first-mile remittance outlets in the sending country frequently encompass startups with a strong focus on particular diaspora groups. Luis Buenaventura, CEO of Bloom Solutions, June 2018, interview with the author.
14 That said, as licensing requirements for crypto-remittance markets in South-East Asia are still evolving, recent remittance volumes of several blockchain startups have been somewhat limited by regulatory uncertainties and liquidity issues on regional bitcoin exchanges. Luis Buenaventura, CEO of Bloom Solutions, June 2018, interview with the author.
15 One could also say that the existing applications of crypto-remittances therefore fall short of the utopian expectations of the new distributed payment infrastructures that provide as a decentralized alternative to private intermediaries – see Swartz (2018) for an analysis of the socio-technical imaginaries of ‘digital metallism’ and ‘infrastructural mutualism,’ often associated with cryptocurrencies.
Additional information
Notes on contributors
Daivi Rodima-Taylor
Daivi Rodima-Taylor, PhD is a researcher and lecturer at the African Studies Center, Boston University. Her research interests include financial inclusion, fiduciary culture, and economic informality.
William W. Grimes
William W. Grimes, PhD is a professor of International Relations and Political Science at Boston University. He studies financial policy and the political economy of East Asia.