Remittance Market Breaks Out Into Free-For-All
Increasing competition from banks, credit unions and money transfer companies has heightened competition and driven down pricing in the international remittance markets, according to a new study issued this week by the Pew Hispanic Center. But even though banks and credit unions have slashed their pricing below that of traditional money transfer providers, like Western Union and MoneyGram, they have been unable to capture much market share, still less than 3%, the study concluded.
Credit unions are still hampered by field of membership limits and who they can serve and by restricted hours, with many having limited weekend hours, popular times for sending money back home for immigrants. Still, new marketing campaigns aimed at Latino immigrants have helped induce as many as 400,000 of the estimated unbanked Hispanic immigrants to open new bank or credit union accounts, the study estimated.
The report details the entry of credit unions and the World Council of CUs into the remittance market and some of their more successful campaigns. Among the credit unions cited for their remittance programs are: Santa Cruz Community CU, Greater El Paso CU, Midwest Industrial CU, Coast Hills CU and Latino Community CU.
One of the findings of the study was that despite the increased competition introduced to the market over the past three years, including WOCCU's IRnet program, the rate of decline in pricing has slowed markedly during that time. That suggests that further reductions may be difficult to achieve under current market conditions.
Release of the study was timed to coincide with last week's meeting of G-8 Economic Study, where one of the topics of discussion was scheduled to be the international remittance market.