In an effort initiated by the European Commission, service providers facilitating remittances to Ukraine signed a Joint Statement in Brussels on 27 September 2022.
The Joint Statement aims to expand the options for making affordable and transparent money transfers to support Ukrainians and Ukraine. Specifically, the document prioritizes:
- further promoting the provision of money transfer services and converging relevant fees to a target level of 3% (as stipulated in the G20’s Sustainable Development Goals and Roadmap for Enhancing Cross-Border Payments)
- reducing total commissions for funds transfers, both unilaterally and bilaterally, at least for the duration of russia’s aggression against Ukraine
- disclosing the total size of transfer fees, in particular those applied to the euro or hryvnia exchange rates set by the ECB and the NBU
- focusing on maintaining the availability of money transfer services through a network of agents, and continuing the digitalization of such services.
The Joint Statement was signed by the leadership of the payment system operators of international payment systems and their participants operating in the EU, Ukraine, and elsewhere: Visa, Mastercard, Wise, Ria Money Transfer, Extrabanca, Small World, TransferGo, CB PrivatBank JSC, Oschadbank JSC, UKRGASBANK JSB, Raiffeisen Bank JSC, PUMB JSC, A-BANK JSC, NovaPay LLC, Ukrposhta PJSC, UFG PrJSC.
They pledged to help provide competitive money transfer services to the Ukrainian diaspora and displaced Ukrainians who relocated abroad as they fled the war, as well as to anyone wishing to support the people of Ukraine and send funds to the country.
The document was signed during a roundtable attended by Oleksii Shaban, NBU Deputy Governor, Mairead McGuinness, European Commissioner for Financial Stability, Financial Services and the Capital Markets Union, Jean Pesme, Global Director, Finance in the Finance, Competitiveness & Innovation (FCI) Global Practice, World Bank, and other officials.
“We are grateful to our international partners and signatories of the Joint Statement for this effort and the joint decision to help Ukrainians and their families, in particular those who were forced to leave their homes due to the war. We are thankful to all those who are generating ideas for how to help Ukraine, looking for ways to implement them, and developing existing areas of support,” said Oleksii Shaban. “Reducing the cost of remittances to Ukraine will provide significant cost savings to senders and make a solid contribution to the expansion of assistance to the Ukrainian people. I am sure that our joint efforts will prove useful not only for Ukrainians, but also for the whole world.”
Ukraine’s payment infrastructure continues to operate smoothly even as the war grinds on, Oleksii Shaban said. Transfers can be received in Ukraine through all available methods that were also available in peacetime (international money transfer systems, SWIFT, card-to-card, IBAN).
At the outbreak of the war, most international money transfer systems completely canceled their fees for remittances to Ukraine, Oleksii Shaban said. Seven months into the war, many of them continue to offer their clients free transfers to Ukrainian-based accounts, and special terms for sending funds from major donor countries. On top of that, international money transfer systems are an important channel through which international organizations, such as the International Committee of the Red Cross, provide humanitarian aid and social payments to Ukrainians.
Overall, USD 7.6 billion in remittances was transferred to Ukraine in January–July 2022, according to the NBU’s early estimates. Despite the war, this is only 5.7% less than in the same period of the pre-war year.
This estimate includes transfers both via official channels – such as banks, international money transfer systems, post offices – and through unofficial ones.
The war in Ukraine reduced official remittances by approximately 12%. At the same time, inflows via informal channels increased by almost 3%.
Almost a quarter (24%) of all funds transferred to Ukraine from abroad in January–July 2022 came via international money transfer systems.
As part of the Joint Statement signed today, international systems will cut their fees for money transfers, according to the NBU. This will stimulate people to prefer safer channels for making remittances to Ukraine. This will give an additional boost to the development of more transparent, accessible, and competitive transfer services and ease the fallout from the humanitarian crisis.
The Joint Statement by service providers facilitating remittances to Ukraine will be valid for nine months from the date of its signing. After that, the document will be reviewed to assess whether it meets current conditions and its humanitarian objective.
The Joint Statement remains open for signing by any other international payment systems and money transfer service providers who wish to show solidarity with Ukraine.