New Orleans Handling remittances from working immigrant families is such a lucrative business that progress is measured in very small steps. We were delighted to take one with Scotia Bank when they announced in Toronto that they were lowering costs for remittances from their account holders using a combination of their online access and a partnership with Western Union. ACORN Canada had made this demand as part of the back-and-forth last summer in Community Organizations International / ACORN International’s first multinational campaign focusing on remittances. We were delighted that they made this concession to us, but….
It’s hard to be happy even with a small victory because there is so much more. Even with the online capacity being installed for Scotia customers, the costs are still way out of line with the reality of the bank’s costs, making this a huge profit center, and therefore almost certainly predatory.
Scotia now trumpets that it will charge $9.00 plus 1% on any transaction. On $100 bucks the minimum charge would be $10.00 or 10% of the total transaction. Oh, no, that’s not right!
On the Scotia website they advertise the savings:
- $10.20 from Toronto to China on a $580 remittance
- $16.80 from Montreal to USA on a $420 remittance
- $4.00 from Calgary to Philippines on a $100 remittance
- $7.80 from Toronto to India on a $320 remittance
- $7.70 from Vancouver to Jamaica on a $130 remittance
Since most of this is being done via Western Union, the real revelation when you examine these new Scotia transfer cost savings is how much Western Union is charging for what should be trivial transfers within the region, like the ones from Montreal to the USA, which is next door, or Vancouver to Jamaica which is right off the Florida coast. Normally, a transaction would have cost another 3% from Canada to USA and another 6% to Jamaica. Of course there is another 4% they are making on the Philippines without this new Scotia reform. The savings in the other countries are fairly trivial, though not insignificant to China and India, but as Scotia’s advertising folks boost the level of the remittance to $300 and $500 plus, all of us can tell what is going on.
But, let’s celebrate the small victory with Scotia, since there are many large banks that have not yet conceded this much, and let’s keep in mind how long we – just like this money – are still forced to travel to really win significant savings.
Western Union is obviously at the heart of this issue!