Transforming International Remittance for Serbian Diaspora using Blockchain and Digital Identity

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This case was submitted as part of the Call for Innovations, an annual partnership initiative between OPSI and the UAE Mohammed Bin Rashid Center for Government Innovation (MBRCGI)

AID:Tech’s blockchain remittance solution offers affordable, transparent money transfer services to users in and outside of Serbia. Implementation partners, senders and recipients gain traceability over the remittance process with fees >3%; in line with UN SDG 10.C
The solution is developed in partnership with UNDP Serbia and part-funded by The Rockefeller Foundation. The solution launched in September 2018 with the support of the city administration of Nis, Serbia.

Innovation Summary

Innovation Overview

The international remittance market is expected to reach US$616 billion in 2018. Whilst costs and speed at which international remittance has significantly improved for many, users is less than developed economies continue to be subjected to disproportionately high costs. Remittances for South African users can reach as high as 24% per transaction. Across the world, the average cost per remittance has reached around 7%. For the Serbian Government, if also solves the problem of the diaspora re-engaging with their home country.

With international remittance playing a key role in economic development, especially in the context of growing global movement, the costs and, for some, the inaccessibility can be oppressive and leaves much to be desired.

The high costs of existing remittance offerings contribute to further issues. In 2017, personal remittance inflow amounted to US$ 3,587,025,444. With amounts that constitute almost 10% of the country’s GDP, there has historically been little transparency into how remittance converge from across the world in Serbia and are redistributed by recipients for various needs and purposes. High costs also lead to the proliferation of informal services where the lack of oversight leads to further opaqueness as well as lack of protection for users as consumers.

To encourage micro and macro economic development, there is clear demand to reduce remittance costs, in Serbia and globally. In line with the UNDP’s objectives, greater transparency into a key part of the country’s economy will also enable more effective and positively impactful decision making, especially around strategy and policy making in a sustainable manner.

The solution is a product of a collaborative partnership between AID:Tech and United Nations Development Programme (UNDP) Serbia. It is one that encompasses the end-to-end remittance journey. The solution will be made available to Serbian Diaspora as senders, who wish to remit to friends and family in Serbia as recipients. The solution will also have dedicated interfaces for UNDP Serbia administrators, and for merchant partners, including utility providers and grocery retailers.

The project objectives include providing affordable remittance fees to users, amongst others. This project will see remittance fees no higher than 3% per transaction for senders. Recipients do not bear any fees at all. Another objective of this solution is to provide transparency and insight into international remittance from an institutional level. With remittance playing a key role in country economy, the Serbian government has keen interest in playing a more active, impactful role to ensure that remittance funds positively impact lives of the country’s citizens. With better understanding of how funds enter and are distributed, authorities are better placed in decision-making, especially when concerning with economic policy making. In particular, the solution has the support of the Serbian Prime Minister, Ana Brnabić, and involves the city administration of Nis where the pilot will launch.

At present, AID:Tech is working with UNDP Serbia to implement project launch, which will be followed by platform maintenance and ongoing discussions around scalability and replicability. Beyond scaling service availability for Serbian users, there is expectations to replicate the same solution via other UN country offices in Q1 and Q2 of 2019.

Outside of AID:Tech’s partnership with the United Nations Development Programme, this solution is also currently being considered by the Asian Development Bank for implementation in the Pacific. This opportunity may see further partners on board, including Citi, who are interested in integration of payment technologies with the AID:Tech blockchain solution for data capturing, structuring and dissemination - injecting transparency in the remittance process, for instance, between Australia, New Zealand, Samoa and other Pacific Islands.

Innovation Description

Innovation Development

Innovation Reflections

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Year: 2018
Level of government: Local government


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