Dallas' MoneyGram Expands International Money Transfers, While Most Banks Are Slashing Services

Categories: International

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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.


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8 comments
RTGolden1
RTGolden1 topcommenter

"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."

Good.  Parkland Hospital has a bill that needs to be paid and we're apparently inviting about 2,000 new MoneyGram houseguests up from the McAllen area!

ThePosterFormerlyKnownasPaul
ThePosterFormerlyKnownasPaul topcommenter

"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."

Make that illegal immigrant families for the most part since it is estimated that there is about 20 million illegal immigrants from Mexico, Honduras and Guatemala  ...

$61B is about 15% of the 2013 Mexican GDP

The 2013 Honduran GDP is $18.55B ,and  Guatemalen is $53.8B.

The total remittances to these three countries is 5% of their combined GDP

MikeWestEast
MikeWestEast

MoneyGram does not endure the rules set by Fed Reserve and US Treasury (OCC).  It is example of Feds trying to limit risk driving business and customers to more risky businesses with less supervision.

dingo
dingo

This article will surely be of interest to Latin American migrant workers, unaccompanied immigrant children, Latin American workers, immigrants, undocumented immigrants, Latin Americans, immigrant families, and oh yea, ILLEGALS!

NewsDog
NewsDog

@MikeWestEast  But they are subject to the FinCEN and AML regulatory issues.

That's a big reason the banks are getting out. The potential fines far out weigh the possible profits.

TheRuddSki
TheRuddSki topcommenter

@dingo

The arrival of children who are dispersed to actual or created families is a financial windfall for illegals cruelly shut out of the job market by draconian programs such as E-Verify and the heavy fines levied against hapless employers who are forced to use black market labor.

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