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 Business News | June 2008 
Western Union Calling
 Dollars & Sense
While it has undeniably become easier and more convenient to send money across the border in the last decade, activists charge transfer services, especially Western Union, with taking advantage of their most loyal customers.
Remittances represent a nearly $1 billion a year industry for Western Union; global migration is so central to the company’s profits that “forecasts of border movements drive the company’s stock,” according to the New York Times. Western Union’s huge slice of the industry pie allows the company to charge fees from 4% to as high as 20% of the amount remitted.
The Oakland, Calif.-based Boycott Western Union campaign asserts that the company fails to invest an adequate portion of its earnings in the communities of the customers from which it profits. Its campaign aims to convince Western Union to sign a Transnational Community Benefits Agreement—like the Community Reinvestment Act for banks—that would “ensure community reinvestment of $1 per every transaction while also forcing the company to reduce its fees and establish fairer exchange rates.”
In the meantime, experts at the IDB and elsewhere insist that this is a perfect opportunity for banks to get more involved, and are trying to encourage partnerships between U.S. and Latin American banks and to extend networks into Latin America’s more rural areas, where access to banking is notoriously scarce. More competition, they argue, would help push transfer fees down and improve customer service. |
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