A new report found that Western Union and Moneygram reportedly charge Africans working in the U.S. and Europe twice as much to wire money home than their Latin American and Southeast Asian counterparts.
The Overseas Development Institute (ODI) found that transactions fees cost the region an estimated $1.8 billion annually. Western Union and MoneyGram account for two-thirds of remittances, or $586 million of the loss associated with fees, the report found.
Remittance fees have gone down for people sending money to Southeast Asia and Latin America, which is in keeping with G8 and G20 targets to reduce transactions costs, but the cost of sending money home to Africa has remained the same.
The remittances to Africa account for five percent of the continent’s GDP. Maria Quattri, one of the authors of the ODI report, told Al Jazeera that the “message of the report is the poorest people in the world, Africans, are paying the highest charges for remittance fees.”
Quattri calls for better regulation of money transfer service providers and banks. She blamed a lack of competition in the industry for the exorbitant fees.
She said, “We want to see greater transparency on charges, in particular charges on currency conversion fees.” She added that ODI has called on U.S. and British financial regulators to better assess transaction costs. She also called for international governments to promote the creation of more viable money transfer providers.
Read more at america.aljazeera.com