Tag Archives: Remittance Justice Campaign

Developing Money Transfer Alternatives to Beat the Remittance Cartels

currency-fair1New Orleans    As we were debating next steps for ACORN International’s Remittance Justice Campaign in Bristol, it was exciting to hear that Italy and Honduras are beginning to make more progress in taking the steps to get legislative assemblies to regulate the costs of transfers, and certainly as ACORN grows in the United Kingdom there are discussions about linking with the parliamentary committees that had offered support earlier.  Sitting in London’s Heathrow Airport waiting to fly home, we got our hands on an international edition of the Times and saw an article that seemed to herald a potential breakthrough on the logjam at least for the more digitally enabled among our members.

The oft repeated claim of all of the techno-wizards is that they exploit “inefficiencies” among legacy companies and in outdated marketplaces.  Certainly when it comes to the multi-billion dollar rip-offs of migrant workers and immigrant families, banks and money transfer organizations have had no interest in lowering the fees to more accurately reflect the real costs of transferring cash in our lightning fast digital age, wanting instead to continue the predatory practices as long as possible.  The story focused on a start-up called Transfer-Wise based in London that has developed technology allowing peer-to-peer transfers of money that eliminate all of the charges larded on by the financial companies.  Currently, the company allows transfers within the European Union countries including the UK obviously.  Are they ready to bring it to the USA and Canada?  In effect they say, hell, yes, but the major hurdle is getting banking licenses.

Transfer-Wise isn’t the only horse in this race.  Certainly, there’s Square, which has undercut the banking control of point-of-sale retail devices using with lower fees and enabled collections using smartphones and other credit cards.  There’s also something called CurrencyFair based in Ireland and run by an Australian that offers an exchange service and has moved over a billion worth of cash as well.   Part of the money financing Transfer-Wise is coming from the founders of PayPal, which is in fact a clunky way to transfer monies now, but less useful as a replacement for standard remittances in our experiences.  Intriguingly, they report a rumor that the company may be in talks with Facebook for a facility that would allow money transfers over the social network.  Of course whenever they say it might be a rumor, we can’t discount the fact that they may have started the rumor themselves, but, regardless, if you perk up your ears you can start to hear the death rattle for the banking and MTO cash register that the legacy financial companies have made out of desperate families trying to support each other country to country.

I hate to rain on my own good news here, but as much as I’m rooting for these peer-to-peer alternatives, the next problem will be delivery and how all of our people can bridge the digital divide enough to benefit from cheaper money transfer systems.  Nevertheless, we’ll cross that bridge next if at least there’s a way to cut out the greedy middlemen finally, no thanks to our governments and banking regulators.


The Problem of Remittances and Financial Literacy for Immigrants

ACORN International GSU Team: (left to right) Jennifer Phillips, Fred Brooks, Charlene Davison, Alice Lee, Brittany Burgess, Tim Zdencanovic

Atlanta   I got lucky and five students, now calling themselves the ACORN International Team at Georgia State University, picked as their major project at the GSU School of Social Work helping us develop information and support for our Remittance Justice Campaign.   We assembled at a Nepalese restaurant in an Atlanta neighborhood that is at the epicenter of immigrant and refugee resettlement so that we could compare notes and make out plans for the kind of deep and extensive look at remittance experience and costs in a US-city, similar to what we have done in Toronto and Mexico City previously during this campaign.

Going around the table, the reports were encouraging.   The survey instrument had taken shape.  We were making progress securing translators for the target communities among Burmese, Ethiopians, and Latinos.  Several churches and agencies where the students were doing field placements had already been enlisted to help and were showing some interest and enthusiasm in what we would find.  The team was committed to doing blogs and social networking to communicate and get the word out.  The goals of 100 completed surveys per team member could find us with 500 pieces of rich data to work into a report for ACORN International to release in Atlanta, Social Policy, and wider to engage more discussion about the need to change public policy.  We were on our way.

The one roadblock that kept cropping up in some of the reports was a repeated expression of disbelief, if not outright warning, to the team from the “gatekeepers” that immigrants would refuse to share information about the real costs of remittances with us.  One outfit offered to circulate it for us so that maybe they could extend more legitimacy to our questions about costs and transfer methods.  Another well intentioned soul suggested we not ask specifically what the cost of remittances were or the amount sent but give “ranges” between high and low dollar amounts.

As well meaning as the comments might have been, I was amazed at how clearly they and these notions were actually building the infrastructure for financial exploitation and illiteracy for “new” Americans that would inevitably and predictably lead them now predatory and perilous paths.  By avoiding real questions, discussion and engagement on practice and costs, immigrants and refugees would be relying on “word of mouth” recommendations about “best practices” rather than real data on the least expensive and most secure remittance streams and most reputable, reliable money transfer organizations (MTOs).  The gatekeepers were also assuming and projecting cultural values about the appropriateness of discussions about money that might be more common here, than elsewhere, and, more importantly, were making predictions not premised on field experiences.  They were projecting their own lack of comfort around financial issues onto the students before our team was in the field and could evaluate the credibility of their advice.  All of this was also in the face of information from the team already that those groups receiving resettlement grants from US-based sources almost invariably sent most of the money home immediately to their families left behind, and were also clearly not getting advice on the cheapest ways to make such remittances.  It also goes without saying that the team was not even asking for people’s names on the survey, unless volunteered.

In truth our experience in Canada, Mexico, and around the world where we have collected the data for the Remittance Justice Campaign is the opposite.  People can hardly wait to talk about their experiences in making remittances, especially since the dollars are dear and few can believe how much the middle men are raking off.  The Pew Trust and InterAmerican Bank have also contracted for such surveys repeatedly through “cold calls” and usual methodology without any difficulty.

Why would community organizers and total strangers have found that immigrants are anxious to share remittance experiences, yet some gate keeping agencies been resistant to real discussions with their “clients” about such critical issues?  The answer may lie right there:  seeing them as clients, rather than people, like the rest of us, trying to navigate confusing financial systems with limited information, and desperate for help.  New immigrants and refugees deserve better frankly, and in this area they deserve and have earned justice not continued exploitation.