Likely steps to keep remittances flowing.

According to a recent World Bank report, remittances to low and middle-income countries are projected to fall by nearly 20 percent. In order to prevent further damage, the government must do everything to keep remittances flowing in times of COVID-19 and beyond. Following are a few actionable measures to keep remittances and development financing flowing:

1. The remittances should be deemed as an essential financial service so that they can continue operations amidst the pandemic, allowing migrants to continue sending funds. Given the health risks, hygiene and social distancing measures must be in place at agent outlets to ensure that safety is not compromised during pandemic.

2. Remittance services should be supported by a sound, predictable, and non-discriminatory legal and regulatory framework that will lower remittance costs, improve formal channels of cross-border transactions, mitigate the decline in remittances, and expand the use of digital solutions. An effective regulatory framework should balance innovation and risk during the transition. As providers struggle to maintain operations and sustain business costs, governments could provide concessional lines of credit, and consider temporary tax breaks or waivers on their operating expenses and fees. Governments could become more vocal in advocating the digitization of wage payments, which would avoid precarious in-person transactions and result in time and cost savings.

3. To encourage the use of digital remittance channels, a number of critical access issues must be addressed first - the most critical of which is the issue of 'know-your-customer'. Today, in order to open a digital account such as a mobile wallet, regulations in many countries require physical IDs and customer signatures. In times of social distancing, these present health and safety risks. Allowing electronic signatures for low-value transaction accounts, would not only reduce compliance costs but would enable migrants to use the service more easily.

4. Ensuring senders and receivers access to digital channels is critical to keep remittances flowing during lockdowns and limited mobility. Those with limited digital access are often the ones who rely on remittances the most. These people often depend on informal remittances, carried back by migrants when they travel. To counter this, access to formal remittances channels should be enabled by...