Wells Fargo & Co. will announce today that it will waive or reduce remittance fees for its customers, and that it now offers money transfers to recipients without bank accounts in five countries.
The San Francisco banking company also plans to disclose to remittance customers the foreign exchange rate and the margin between the wholesale and retail prices of currency.
"We are not in this business to be in the remittance business. We are in this business because we want to acquire and hold households for ourselves and sell them other products," said Daniel Ayala, the senior vice president of Wells' remittance business.
Wells is one of several companies waiving or lowering remittance fees to bring immigrants into the banking fold.
Last month JPMorgan Chase & Co. began waiving fees on wire transfers of up to $1,500 to Mexico for all its checking account holders. Bank of America Corp. does the same through its SafeSend program.
Wells now offers "account-to-cash" transfers to Mexico, El Salvador, Guatemala, Vietnam, and the Philippines. It also offers remittances to China and India, but recipients there still must have bank accounts, because of "technical and compliance issues," Mr. Ayala said.
Gwenn Bezard, a research director at Aite Group LLC in Boston, said that by offering remittances to unbanked recipients, Wells is effectively providing customers the same service that they would get from Western Union Co.
Mr. Ayala said the changes to the remittance program Wells introduced in 1994 have made the transactions cheaper, faster, and easier to evaluate than before.
"We now have total price transparency to the consumer, which very few players, if any at all, are offering today," he said.
"Consumers can see what the wholesale price is, what we're offering, the difference between the two, and they can decide for themselves if we are the right offer or not."
Mr. Bezard said such disclosures are only offered in New York, where it is required by law. Banks have shied away from making such disclosures because of currency fluctuation, he said.
But Mr. Ayala said that in most of the countries where Wells sends money, "the fluctuation in currency is not that significant," and that his business gets support from Wells' foreign exchange group. "Their job is to ensure that the rate that we're offering and the positions we have to cover are in line with our risk tolerance."
Wells' average remittance is $670, almost double the industry average, he said, because the company has signed up lot of customers and because it has been operating in markets with established immigrant populations.
It will waive remittance fees — which usually run about $5 a transaction — for those who have accounts with Wells and for anyone who opens a checking or savings account through Sept. 30. After that the company will waive or reduce the fee, depending on the number of Wells products and services a customer uses.
