What is an international remittance service?
The World Bank estimates that nearly 200 million people are living outside their countries of origin and are sending over $250 billion of their earnings to families back home. The average remittance fee at traditional remittance companies can range from 10-25% per transaction. Western Union and MoneyGram are two of the largest money transfer operations and have nearly 500,000 agent locations in over 200 countries.
The World Council of Credit Unions’ International Remittance Network (IRnet) is comprised of 38,000 credit unions throughout 85 countries. Through its partnership with Vigo Remittance Corporation, credit union members in the U.S. can send up to $1,000 to Mexico for as little as $10.
Mobile money transfers are gaining popularity in developing countries where more people own mobile phones than have bank accounts. A project underway, the GSMA Mobile Money Transfer, would provide the environment for the mobile phone to become the key enabler for sending international remittances, as it removes the need for physical points of presence.
Who uses international remittance services?
Unbanked immigrants are the primary users of remittance services to send money back to their countries of origin. Latinos, in particular, frequently use transfer services to send money to friends and relatives back home. In 2008, $67.5 billion in remittances were sent to Latin America and the Caribbean, of which $25 billion went to Mexico alone. For many of these countries, remittances have become a source of household income and a significant proportion of the country’s gross national product.
Why should credit unions care?
Sixty –three percent of immigrants living in the U.S. today are unbanked, creating a huge opportunity for credit unions. An essential product to attract and serve the unbanked immigrant market is an international remittance program.
What can credit unions do?
Credit unions that wish to reach and serve an immigrant market should include remittance services as part of their outreach strategies. Through such programs as WOCCU’s IRnet services, credit unions can save their members money and build strong, loyal relationships with them.
International Remittances – Latino Community » View details
The credit union collaborates with the World Council of Credit Unions (WOCCU) and IRnet to provide wire transfers to over 30 countries and to locations within the U.S.
International Remittances – Village Credit Union » View details
Enrique Cruz-Garcia believes the dramatic increase in the credit union’s international remittance program came as the credit union was strengthening its Hispanic outreach efforts by accepting Individual Tax Identification Numbers (ITINs) for savings and loan products
- A Technical Guide to Remittances: The Credit Union Experience – WOCCU
- Card-Based Remittances: A Closer Look at Supply and Demand – CFSI
- General Principles for International Remittance Services – World Bank
- The Remittance Marketplace: Prices, Policy and Financial Institutions – Pew Hispanic Center
- Banking in a Global Market: A Financial Institution Guide for Offering International Remittance Services
- Founders FCU Taps into the Hispanic Market – WOCCU’s CU World Article
- FOCUS on Guatemala – WOCCU Brochure
- IRnet Brochure – WOCCU
- “Payments System Research Briefing,” December 2008 by the Federal Reserve Bank of Kansas City.
- Directo a México brochure.