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Fintechs and card schemes have signed a joint statement committing to providing the war torn EU membership candidate with cheaper, more accessible, remittances between itself and the EU.
Signatories of a joint statement have said that they are committed to “more affordable, more transparent and more accessible” remittances to Ukraine.
“EU and Ukrainian remittance service providers share the conviction that Ukrainian migrants, including refugees, should have access to affordable, accessible and transparent remittance services to support their families back home,” the joint statement says.
Signatories to the joint statement include the likes of Mastercard, Visa, Austria’s Raiffeisen Bank, as well as fintechs such as Wise and TransferGo.
Speaking to VIXIO, a spokesperson for Wise welcomed the agreement.
"Since the start of the war, our teams have been working hard to keep remittances to Ukraine flowing to help people in the country.
“While it's become harder for us to operate, we remain committed to keep our product operational for those who need it,” the spokesperson said.
Remittance flows to Ukraine surpassed $14bn in 2021, representing around 7 percent of GDP, and equivalent to 2.1 times the size of foreign direct investment in the same year.
Meanwhile, the amount of refugees from Ukraine in the EU since Russia invaded is estimated to be around 4m, with many going to neighbouring countries such as Poland.
Signatories of the joint statement have committed to sustaining their efforts to facilitate remittance flows and to ensuring that remittance fees continue to decrease and converge towards the established target set at 3 percent in the Sustainable Development Goals and G20 Roadmap on cross-border payments.
Additionally, co-signers have volunteered to bilaterally lower total fees, sustaining their efforts at least during the war.
The firms involved will also disclose total fees, including transfer fees and foreign exchange margin applied over the euro or hryvnias exchanges, with rates fixed respectively by the European Central Bank and the National Bank of Ukraine. They will also seek to maintain the accessibility of remittance services through a network of agents and the further development of digital services.
“The European Commission's joint declaration includes commitments that are really close to our heart and have been part of our product from the start, including full transparency on mark-ups that can be hidden in inflated exchange rates,” said the spokesperson for Wise.
According to the fintech, transparency will lead to lower prices because it increases true competition as it enables people to compare and shop around.
“Today, banks and other providers are still able to hide the bulk of the cost in a bad exchange rate, but this declaration puts an end to that for remittances to Ukraine.
“This is a great first step in the right direction and we're hopeful this level of transparency will become the norm for remittances everywhere."
The firms currently involved, as well as the European Commission, have called on other firms to sign up.
“For this approach to be efficient, as many EU and Ukrainian money transfer operators as possible should be part of this joint initiative.
“This joint statement remains open for all operators willing to sign at any time in solidarity with Ukraine.”
The companies’ move has been welcomed by the European Commission, with financial services chief Mairead McGuinness heaping praise on those involved.
“Finding practical solutions to help Ukrainians living abroad, many forced to flee as a consequence of the war, to send remittances to their loved ones at home is a very concrete example of our solidarity,” McGuinness said.
“I welcome that EU and Ukrainian companies active in remittances have come together to achieve this objective.”
The new agreement will remain in place now for nine months before being reviewed, considering the fast pace of the changing situation in Ukraine.
