It is estimated that nearly 10% of the world’s population currently sends money to relatives and loved ones in other countries. Knowing this, it is perhaps easy to understand why so many money transfer companies have sprung up in cosmopolitan cities such as London, and why so many individuals have become outraged by the prices they are being charged to send this money.
According to recent statistics, the annual sum of remittances sent from the UK to locations around the world totals in excess of 15 billion pounds. Over 66% of these funds are sent to developing countries. According to the World Bank, the total sum of remittances in 2014 will equate to well over 278 billion pounds.
The lofty fees that many of these money transfer companies are charging for the arrangement of currency delivery has sparked outrage amongst citizens and politicians alike. Labour MP Tessa Jowell has recently launched an investigation into several of these predatory establishments, stating, “Many people who are trying to support friends and family abroad are being ripped off. Instead of their hard-earned money going towards medical bills, books or to cover the cost of failing crops, huge amounts are being creamed off by the giant money transfer companies who have cornered the market.”
Jowell is hoping to gain support for new legislation which, if enacted, would force local money transfer services to cut their fees by half during the months leading up to Christmas, as this is typically the peak time for individuals to send money to loved ones abroad. It will be interesting to observe how the target companies respond, as this is typically one of the most profitable times of the year for them.
According to Scott Paul, a senior humanitarian advisor for Oxfam, the need for new reforms in this particular market are absolutely necessary. “People all around the world depend on help they receive,” Paul stated, “and remittances are a critical part of their efforts to overcome poverty.” Whether or not these desired changes will be enacted has yet to be seen. What can be certain, however, is that awareness of this particular issue has increased dramatically.