Money makes the world go round, but high-fee MTOs won’t give it to you straight.
Aug. 10, 2015
Money Transfer Operators are the companies through which migrant workers are able to provide for their families thousands of miles away.
Last year, the UK alone sent an estimated $25 billion (£16.1 billion) in remittances to other nations. By utilising opportunities in well developed countries, millions of people send money home to care for their families, who may not have the ability or prospect to be financially independent. Nearly a quarter of less economically developed countries are recipients of remittances that are greater than all cross-country money transactions for business, trade or investment. For these states, money transfers within families play an important part in the development of their economies.
This is why it is a real pity that money-grabbing MTOs are unabashedly charging extortionate fees to facilitate such money transfers. WesternUnion, WorldRemit and MoneyGram are all culprits of including hidden fees and overpriced exchange rates in their money transfer prices. The June 2015 report from the World Bank revealed that these operators can charge up to 17% for a wired money transfer across borders. They may do this by including hidden costs like “Anti Money Laundering” checks or they may simply increase their exchange rate in order to present low service fees. A lack of clarity in these charges along with constantly varying rates makes it easy for these companies to earn more from each dollar, pound, and any of the 135 currencies they handle. Such high fees are unfair to those millions of migrants that work endlessly for their families in foreign countries, and needlessly puts more pressure on their finances.
But it does not have to be this way. New and innovative digital companies are paving the way for low cost remittances worldwide. We are one such company, trying to solve the problem of the lack of clarity consumers have in establishing the costs of remittance transactions. Given the details of where and how much money is to be transferred, TransferGuru will clearly present the charges you would pay to various MTOs. For example, if you used the site to compare the costs to send £500 from the UK to Mexico, you would see that Western Union would charge you around £32 (6.4%) for the transfer, whereas Azimo would charge just £3 (0.6%). This is a prime example showing just how much the bigger companies are willing to rip you off… and how much you stand to save when using the simple and clear comparison engine at TransferGuru.
One of the reasons why new tech companies like Azimo are considerably cheaper is due to the fact that they predominantly function on a digital platform. By doing so, they are able to pass on the savings to the customer, as there is no need for a middle man to physically handle the money. Instead, clients can simply transfer money directly from their smartphone or tablet. Moreover, these companies are much more transparent when it comes to costs for their services, setting themselves apart from the traditional companies and banks.
You may be surprised by how much money you can save by doing your research and using new companies rather than the older, more dominant providers. It is wrong that the banks and traditional companies around the world abuse their large share in the market by charging high remittance fees, but rising competition leads the way to better, clearer remittance services for everyone.
By Anshuman Sinha, TransferGuru Research