By Charlie Gillig, Founder RemitRight
Last week I was thrilled to lead a webinar on international money transfers for GDW 2015. The reduction of remittance costs is an often over-looked, but potentially massive way of improving the economies of developing countries through the diaspora. In 2014, over $560 billion dollars were sent through formal channels across borders. That is four times the amount of global Overseas Development Assistance!
The problem is that remittance senders also paid over $40 billion in fees to money transfer operators, amounting to a little less than 8% per transaction. For at least the immediate future, there will be costs associated with fraud protection, payout locations and company overhead costs among others. But there is one very important way that remittance costs can be reduced drastically and immediately: through greater market transparency.
For decades the costs of remittances have been notoriously high and opaque. Money transfer operators often hide fees from consumers through significant exchange rate mark-ups, generating higher costs for consumers and large profits for the companies. Currently in order for individuals to compare costs and preferences between money transfer operators, they must go to each money transfer company website separately to compare choices or rely on word on mouth.
We founded RemitRight to stop money transfer companies taking advantage of hard-working migrants through hidden fees and a lack of transparency.
We founded RemitRight to stop money transfer companies taking advantage of hard-working migrants through hidden fees and a lack of transparency. To solve the problem RemitRight lets users search and compare money transfer options based on reliability, exchange rates, user reviews, payment methods, delivery options, transfer times and overall best value, similar to other comparison services like Expedia and KAYAK. We also provide informative articles and content that help users navigate the often confusing and complicated choices and calculations associated with international money transfers.
We believe that bringing transparency to the remittance market will increase competition between money transfer operators, leading to better service levels, lower costs for customers and, most importantly, more money being sent into the real economies of developing nations. With so many people in the U.S. now using low-cost smart phones, we have a real opportunity to make the remittance market more transparent and competitive, thereby saving remittance senders $1 billion annually in the United States alone. That is $1 billion that would go to the diaspora in the United States and to their loved ones abroad, and not to money transfer companies.
Since our founding, RemitRight has become the only private sector company certified by the World Bank for improving transparency in the remittance market. This makes RemitRight the most unbiased, transparent and accurate comparison service on the remittance market today. We now offer information on remittances to five countries – Mexico, India, The Philippines, El Salvador and Vietnam – and have plans to add dozens more this fall.
If you missed our webinar please click below: