developing a common framework for measuring transparency in the remittance market presented by leon...
TRANSCRIPT
Developing a common framework for measuring
transparency in the remittance market
Presented by Leon IsaacsCEO, Developing Markets Associates Ltd
Board Member, IAMTN 12 September 2008
Slide 2WB PPP Vienna 2008WB PPP Vienna 2008
Contents
1. Context for transparency
2. The situation today
3. Some options available
4. Possible global standards
5. Next steps
Slide 3WB PPP Vienna 2008WB PPP Vienna 2008
Context
o Transparency is the first General Principle for Remittances
‘Transparency in remittance services, combined with adequate
consumer protection helps to foster a competitive and safe market for
remittances.’
‘It is useful for senders (and receivers) to be able to have full
information about the service in advance’
‘Particularly relevant is transparency about the total price and
speed of the service’. The total price includes the fee, the foreign
exchange rate and any charges paid by a receiver.
‘At the moment the market for remittances is not always fully
transparent’
‘Even if individual RSPs are fully transparent it may not be easy for end
users to compare the price of different services.’
Slide 4WB PPP Vienna 2008WB PPP Vienna 2008
Context (cont)
o The General Principles identify the following areas that transparency can address Transparency by individual remittance service
providers
Appropriate consumer protection
Enabling end users to understand the market for remittances Comparative price information Educational campaigns
Slide 5WB PPP Vienna 2008WB PPP Vienna 2008
Benefits of price comparison
sites
o Consumerso Currently hard to shop around and compare
relevant costs. Provides easy mechanism to compare different services in an unbiased and objective way
o Authorities – regulators and governmentso More transparencyo Potential reduction in priceso Helps with financial literacy of consumers
o Private sector – RSPso Helps to demonstrate the competitive advantage
of their service
The situation today
o Increased interest in consumer price information – particularly via websites
Geld naar huis
WB PPP Vienna 2008
Slide 7WB PPP Vienna 2008WB PPP Vienna 2008
Situation today (cont)
o Most sites have been started by governments, normally the international development ministries
o Objective of the sites is to provide relatively current and unbiased information to consumers to help them become better informed, transmit more through formal channels and for more of their money to be received
o World Bank has launched the Price Remittance Database
Slide 8WB PPP Vienna 2008WB PPP Vienna 2008
Challenges of the situation today
o The sites have been developed using different methodologies and to address different corridors All driven by send corridors
In the language of the sending country
Some show fees but not exchange rates
Sites are updated at different intervals
Data collection methodologies vary
o The initiatives are to be applauded but as more sites are developed there are a number of options to be considered
Slide 9WB PPP Vienna 2008WB PPP Vienna 2008
Options
1. Do nothing
2. Develop a global set of standards for information to be
contained on a price comparison site
3. Develop an umbrella site that links all the sites that
have been developed and that meet a defined quality
standard
4. Develop one global database that covers every
corridor from the key countries
Slide 10WB PPP Vienna 2008WB PPP Vienna 2008
Possible global standards
o Each site will maintain/develop its own identityo Pricing information would benefit from following
the methodology in the World Bank Price Remittance Database A minimum of two representative transaction
amounts but preferably more Fees – on the send side and the receive side
(where present) Foreign exchange rates – these should show the
actual cost to the consumer for the exchange rate provided ideally in the payment currency and as a percentage
No Filter
Search Results for sending £100 £250From UK to Jamaica Data updated on 11 Sep 2008
www.moneygram.com
10 minutes/instant
11171.90 11.62 4.99C/E/ONationwideMoneyGram
Corporate Credit Union
Same day transfer
11180.31 11.56 4.00CLondonRia Financial
Affiliate agentsUp to 2 hours11180.31 11.56 4.00CLondonDT & T
SwiftCash agents30 minutes11204.35 11.37 5.00CNationwideSwiftCash
CNC, SenviaUp to 24 hours11276.40 10.80 5.00C/ENationwideCoinstar Money Transfer
Affiliate agents24 hours11315.01 10.49 4.00CLondonUnited Europhil Ltd
Affiliate agentsNext day service
11319.86 10.45 4.00CLondonEzremit
National Commercial Bank of Jamaica
Same day11380.51 9.97 3.99C/ENationwideSenvia (Cash transfer)
City of Kingston CO-Op + others
24 hours11381.37 9.96 3.00CLondonMoney Remittance
Worldwide
Victoria Mutual outlets
10 minutes/Instant
11432.83 9.56 2.99CNationwideVictotria Mutual
Jamaican bank account or home
delivery1-3 days11433.18 9.55 8.00OOnlineRapid Remit
CompareOutletsSpeed of Transfer
Jamaican Dollar (JMD)s Received for Initial £100
Total Cost £
Fee £Method of Transfer
LocationOperator
2.99
8.00
Fee £
3.00
2.99
8.00
Fee £
3.99
3.00
2.99
8.00
Fee £
4.00
3.99
3.00
2.99
8.00
Fee £
5.00
4.00
4.00
3.99
3.00
2.99
8.00
Fee £
5.00
5.00
4.00
4.00
3.99
3.00
2.99
8.00
Fee £
4.00
5.00
5.00
4.00
4.00
3.99
3.00
2.99
8.00
Fee £
4.00
4.00
5.00
5.00
4.00
4.00
3.99
3.00
2.99
8.00
Fee £
4.99
4.00
4.00
5.00
5.00
4.00
4.00
3.99
3.00
2.99
8.00
Fee £
Victotria Mutual
Rapid Remit
Money Remittance Worldwide
Victotria Mutual
Rapid Remit
Senvia (Cash transfer)
Money Remittance Worldwide
Victotria Mutual
Rapid Remit
Ezremit
Senvia (Cash transfer)
Money Remittance Worldwide
Victotria Mutual
Rapid Remit
United Europhil Ltd
Ezremit
Senvia (Cash transfer)
Money Remittance Worldwide
Victotria Mutual
Rapid Remit
Coinstar Money Transfer
United Europhil Ltd
Ezremit
Senvia (Cash transfer)
Money Remittance Worldwide
Victotria Mutual
Rapid Remit
SwiftCash
Coinstar Money Transfer
United Europhil Ltd
Ezremit
Senvia (Cash transfer)
Money Remittance Worldwide
Victotria Mutual
Rapid Remit
DT & T
SwiftCash
Coinstar Money Transfer
United Europhil Ltd
Ezremit
Senvia (Cash transfer)
Money Remittance Worldwide
Victotria Mutual
Rapid Remit
Ria Financial
DT & T
SwiftCash
Coinstar Money Transfer
United Europhil Ltd
Ezremit
Senvia (Cash transfer)
Money Remittance Worldwide
Victotria Mutual
Rapid Remit
MoneyGram
Ria Financial
DT & T
SwiftCash
Coinstar Money Transfer
United Europhil Ltd
Ezremit
Senvia (Cash transfer)
Money Remittance Worldwide
Victotria Mutual
Rapid Remit
Operator
MoneyGram
Ria Financial
DT & T
SwiftCash
Coinstar Money Transfer
United Europhil Ltd
Ezremit
Senvia (Cash transfer)
Money Remittance Worldwide
Victotria Mutual
Rapid Remit
Search Results for sending £100 £250From UK to Jamaica Data updated on 11 Sep 2008
www.moneygram.com
10 minutes/instant
11171.90 11.62 4.99C/E/ONationwideMoneyGram
Corporate Credit Union
Same day transfer
11180.31 11.56 4.00CLondonRia Financial
Affiliate agentsUp to 2 hours11180.31 11.56 4.00CLondonDT & T
SwiftCash agents30 minutes11204.35 11.37 5.00CNationwideSwiftCash
CNC, SenviaUp to 24 hours11276.40 10.80 5.00C/ENationwideCoinstar Money Transfer
Affiliate agents24 hours11315.01 10.49 4.00CLondonUnited Europhil Ltd
Affiliate agentsNext day service
11319.86 10.45 4.00CLondonEzremit
National Commercial Bank of Jamaica
Same day11380.51 9.97 3.99C/ENationwideSenvia (Cash transfer)
City of Kingston CO-Op + others
24 hours11381.37 9.96 3.00CLondonMoney Remittance
Worldwide
Victoria Mutual outlets
10 minutes/Instant
11432.83 9.56 2.99CNationwideVictotria Mutual
Jamaican bank account or home
delivery1-3 days11433.18 9.55 8.00OOnlineRapid Remit
CompareOutletsSpeed of Transfer
Jamaican Dollar (JMD)s Received for Initial £100
Total Cost £
Fee £Method of Transfer
LocationOperator
2.99
8.00
Fee £
3.00
2.99
8.00
Fee £
3.99
3.00
2.99
8.00
Fee £
4.00
3.99
3.00
2.99
8.00
Fee £
5.00
4.00
4.00
3.99
3.00
2.99
8.00
Fee £
5.00
5.00
4.00
4.00
3.99
3.00
2.99
8.00
Fee £
4.00
5.00
5.00
4.00
4.00
3.99
3.00
2.99
8.00
Fee £
4.00
4.00
5.00
5.00
4.00
4.00
3.99
3.00
2.99
8.00
Fee £
4.99
4.00
4.00
5.00
5.00
4.00
4.00
3.99
3.00
2.99
8.00
Fee £
Victotria Mutual
Rapid Remit
Money Remittance Worldwide
Victotria Mutual
Rapid Remit
Senvia (Cash transfer)
Money Remittance Worldwide
Victotria Mutual
Rapid Remit
Ezremit
Senvia (Cash transfer)
Money Remittance Worldwide
Victotria Mutual
Rapid Remit
United Europhil Ltd
Ezremit
Senvia (Cash transfer)
Money Remittance Worldwide
Victotria Mutual
Rapid Remit
Coinstar Money Transfer
United Europhil Ltd
Ezremit
Senvia (Cash transfer)
Money Remittance Worldwide
Victotria Mutual
Rapid Remit
SwiftCash
Coinstar Money Transfer
United Europhil Ltd
Ezremit
Senvia (Cash transfer)
Money Remittance Worldwide
Victotria Mutual
Rapid Remit
DT & T
SwiftCash
Coinstar Money Transfer
United Europhil Ltd
Ezremit
Senvia (Cash transfer)
Money Remittance Worldwide
Victotria Mutual
Rapid Remit
Ria Financial
DT & T
SwiftCash
Coinstar Money Transfer
United Europhil Ltd
Ezremit
Senvia (Cash transfer)
Money Remittance Worldwide
Victotria Mutual
Rapid Remit
MoneyGram
Ria Financial
DT & T
SwiftCash
Coinstar Money Transfer
United Europhil Ltd
Ezremit
Senvia (Cash transfer)
Money Remittance Worldwide
Victotria Mutual
Rapid Remit
Operator
MoneyGram
Ria Financial
DT & T
SwiftCash
Coinstar Money Transfer
United Europhil Ltd
Ezremit
Senvia (Cash transfer)
Money Remittance Worldwide
Victotria Mutual
Rapid Remit 9.55
Total Cost £
9.56
9.55
Total Cost £
9.96
9.56
9.55
Total Cost £
9.97
9.96
9.56
9.55
Total Cost £
10.45
9.97
9.96
9.56
9.55
Total Cost £
10.45
9.97
9.96
9.56
9.55
Total Cost £
10.49
10.45
9.97
9.96
9.56
9.55
Total Cost £
10.80
10.49
10.45
9.97
9.96
9.56
9.55
Total Cost £
11.37
10.80
10.49
10.45
9.97
9.96
9.56
9.55
Total Cost £
11.56
11.37
10.80
10.49
10.45
9.97
9.96
9.56
9.55
Total Cost £
11.56
11.56
11.37
10.80
10.49
10.45
9.97
9.96
9.56
9.55
Total Cost £
11.62
11.56
11.56
11.37
10.80
10.49
10.45
9.97
9.96
9.56
9.55
Total Cost £
Slide 13WB PPP Vienna 2008WB PPP Vienna 2008
Possible global standards
o Each site will maintain/develop its own identity
o Pricing information would benefit from following the methodology in the World Bank Price Remittance Database
A minimum of two representative transaction amounts but preferably more
Fees – on the send side and the receive side (where present)
Foreign exchange rates – these should show the actual cost to the consumer for the exchange rate provided ideally in the payment currency and as a percentage
The type of service, e.g. cash collection, credit to a bank account
The speed of the service – time taken for the money to be available
Slide 14WB PPP Vienna 2008WB PPP Vienna 2008
Additional standards (cont)
o An indication of the number of locations where
the service is available in both send and receive
markets
o Data to be verified and updated at least monthly
o Data to be gathered (or at least verified)
independently from RSPs
o No RSP advertising on the site
o Link to other approved sites
Slide 15WB PPP Vienna 2008WB PPP Vienna 2008
Next steps
o Begin discussions now and with key stakeholders
o Establish a working group within the Public and Private
Sector Partnership to make specific recommendations
o Agree standards and communicate
o Establish a monitoring and guidance process
Slide 16WB PPP Vienna 2008WB PPP Vienna 2008
Contact details
Leon IsaacsCEODeveloping Markets [email protected]@iamtn.orgwww.dmassocs.comwww.moneymove.orgwww.iamtn.org
39-41 North Road, London, N7 9DPT: +44(0) 207 700 1990M: +44 (0) 7909938305