Dallas' MoneyGram Expands International Money Transfers, While Most Banks Are Slashing Services
Usien Western Union made it's name as the fastest international transfer service available, but Dallas-based competitor MoneyGram may soon surpass them in customer retention.
It's an oft-repeated pattern in families of diverse nationalities and cultures: A family member goes to the United States to work and person sends money back to relatives in their home country. Repeat until further notice.
This is a way of life that could soon come to a screeching halt, or at least dramatically slowed down. A recent New York Times article detailed how several big-time banks are cutting down on international money transfers, particularly to Latin American and African countries. Transfer costs are skyrocketing, and some are considering slashing services altogether.
It's a move that is intended to curtail American dollars being sent to drug traffickers and terrorists. Yet the biggest effect could be on Latin American migrant workers, who often use international transfer services to wire money to relatives.
But while Bank of America, Citigroup, Chase, Western Union and other major banks are cracking down on transfer services, Dallas-based financial transfer company MoneyGram is quietly expanding transfer services.
The company is specifically listing Mexico, Honduras, El Salvador and Guatemala as countries that will be seeing increased transfer services from the U.S. If these countries together ring a bell, they should -- Honduras, El Salvador, and Guatemala are currently supplying the bulk of unaccompanied immigrant children who are coming into the United States through Mexico.
In a press release last month, MoneyGram announced a new service that would promote faster transfer times for funds. Money transfers from the United States to the four nations, if placed during business hours, would be deposited within the hour.
The company is also expanding partnerships with banks in these countries. As of May 1, MoneyGram transfers may be sent to all banks in Mexico and top banks in Honduras, Guatemala, and El Salvador.
MoneyGram is eagerly tapping into a thriving market of Latin American workers and immigrants, but critics are saying that these latest transfer policies inadvertently place banks in a law enforcement position. By upping international transfer costs, banks make it difficult for undocumented immigrants to send money to dependent relatives.
"It's estimated that 26 million Latin Americans work abroad and many send money home to their family members for food, clothes or other everyday items," Juan Agualimpia, vice President for MoneyGram's Latin America division, told Unfair Park in an e-mail. "We understand that remittance services are a vital lifeline for many Latin Americans."
Of the roughly $61 billion wired to Mexico and Central America in 2013, most of that was sent from the United States. That's no small number, and no small population accessing American transfer services. If MoneyGram becomes the cheapest, most expansive, and fastest transfer service provider, they could soon have a veritable monopoly on their hands.
And for their part, MoneyGram sends the implicit message that they are the only American money transfer company that is willing to support immigrant families.