The fixed-cost floor in cross-border retail payments: a two-point decomposition of remittance prices

The World Bank publishes the average cost of a cross-border remittance at two transaction sizes, USD 200 and USD 500. Because cost as a share of the amount sent is F/S + r for a fixed charge F and an ad valorem rate r, those two published points identify F and r exactly. For Q3 2025 the decomposition gives a fixed charge of USD 7.60 per payment and an ad valorem rate of 2.56 per cent on the global average, and USD 3.50 and 1.54 per cent on the SmaRT indicator of the cheapest qualifying services. Across the sixteen published quarters from Q3 2021 to Q3 2025 the fixed charge lies between USD 6.23 and 7.60 and the ad valorem rate between 2.56 and 3.16 per cent. Two implications follow. First, the ad valorem component alone exceeds the one per cent retail target of the G20 roadmap in every quarter, so no transaction size meets that target under the prevailing structure, and it equals or exceeds the three per cent remittance target in six of the sixteen quarters. Second, the fixed component sets a floor on viable payment size: under the Q3 2025 global-average structure a payment must exceed about USD 1,730 for its cost to fall below three per cent, and about USD 7.80 for its cost merely to fall below the amount sent. The exercise is reproducible from published figures.