RemitOne

Russia's construction sector had last year resulted in a boom of money being transferred to Central Asian countries by migrant workers, but this boom seems to be coming to an end.

The construction business is declining, coupled with increasing unemployment amongst the natives, has led the government to reduce the quotas for migrant workers by as much as 50%.

The Central Bank of Russia's figures show an average money transfer of $656 to Central Asian republics, but this figure is expected to plummet.

There have been growing reports of migrant workers wages being reduced, and in some cases payments being refused altogether. The knock on effects are huge in the Central Asian countries, like in Tajikistan where remittances account for 50% of GDP.

The plummeting Ruble is another cause of problems as exchange rates result in effectively less money being received. This is significant when considering that the Ruble fell by 17% against the Tajik Somoni last year.

The World Bank is predicting only a 4% growth in remittances to Tajikistan compared to 66% growth from 2006 to 2007.

The Central Asian Republics will be the worst hit by this down turn as they rely on people to be able to find work in Russia and send money home. Poverty levels are expected to increase with unemployment.

Money transfer via mobile phone networks has been on the rise for some time now.  Most operators are still trialling in various locations around the globe, but the results from these trials have been outstanding.

Orange have started a scheme with BNP Paribas in the Ivory Coast.

Vodafone have had great success in Kenya with their M-Pesa brand.  They have since signed a deal with Western Union giving access to the worlds largest money transfer organisations outlets in almost every country in the world.

Work has also been going on to get retailers to accept mobile payments for their goods and services.  The GSMA has had an initiative running since February 2008, and in June it signed a deal with the European Payment Council to further this end.

Ten percent of the $250 billion a year remittance market is expected to occur via mobile phone networks by 2010 giving this sector huge potential.

US Banks have increased the rate at which they are closing money transfer accounts of money transfer companies that are transferring to Somalia.

National City Bank closed accounts earlier this year and Huntington National Bank has given its account holders until the end of the year to find alternatives.

The banks are claiming the reason is that it costs too much to monitor these accounts for fraud.

The Somali American Chamber of Commerce and money transfer agencies have been appealing against these closures as approximately 5 million people in Somalia rely on the weekly of transfer of funds to survive.

It has been suggested that the use of money transfer software systems with in-built anti-money laundering protection such as RemitONE would reduce the banks need to monitor these accounts and hence allow them to retain them cost effectively, but the uptake of software amongst agencies is slow.

The US government is concerned by this turn of events with US Representative Carolyn B. Maloney commenting that restrictions like these on licensed money transfer companies could lead the public to use illegal means of transfer.

A federal bill has been passed through the House of Representatives that designed to help banks deal with situations like this by allowing them to rely more on government regulators but it is yet to be passed by the Senate.

Remittances to the Phillipines have grown by over 17% despite the slowing down of the global economy.

It was announced today that remittances for the first nine months of 2008 have totalled $12.3 billion.  This is a significant rise on last year that totalled $14 billion over the entire 12 months.

With 10% of the Phillipine population in overseas employment, remittances are expected to remain strong, though a slow down of growth is expected in 2009.

These figures are a strong indicator of the continued strength of the overseas remittance business.

Western Union and Euronet have announced their results for quarter three 2008.

Both companies have had an increase in revenue despite the global economic downturn with Western Union posting an increase of 14% over the same period last year, and Euronet finishing with an increase of 17%  over the same period last year.

These results are strong indicators of the money transfer business holding up against the prevailing economic conditions.

Expansion plans are continuing at both companies and revenue increase are expected to continue for the forseeable future.

More detailed results can be found here and here.

Western Union, the worlds largest money transfer organisation have come together with Orascom to pilot a new mobile money transfer service.

Orascom operate mobile telephone networks in Pakistan, Bangladesh, Algeria, Tunisia, Egypt, and Zimbabwe.

Orascom's current subscriber base are amongst the worlds largest receivers of remittances and also amongst those who have the least access to banking facilities.

Western Union currently run a mobile money transfer service to the Phillipines from select locations in the West and the Middle-East.  They are hoping to increase the number of sending and locations and, with this deal with Orascom, hugely increase the potential destination market.

With Pakistan and Bangladesh in the top ten destinations for remittances according to the World Bank, and most of North Africa, both Orascom and Western Union hope to provide a high quality service to this emerging and very important business sector.

Juniper Research have just released a report on the growth of mobile phone based money transfer.

Many people in developing countries are ineligible for bank accounts so have to use more informal methods to receive money.  These people also tend to be those who receive the most from abroad and are in need of it most.

The proliferation of mobile phones around the world has led to the creation of money transfer services through the mobile phone networks.

The report estimates some 100 million mobile phone users will use their handsets to transfer money by 2013.  This is expected to amount to $5 billion annually.

It is expected that the major transfer routes will account for most of this money, namely Middle-East to the Philippines, and Western Europe and North America to Mexico, India, and China.

Despite international money transfer slowing due to the global economic crisis, mobile money transfers are expected to continue to grow.

Following the success of the previous conferences in London and Dubai for the past three years, the International Association of Money Transfer Networks announces its Fourth Annual Conference in London, MONEY TRANSFERS LONDON 2008, to take place at the Hilton Park Lane Hotel, located right in heart of Mayfair, on the 17th and 18th November 2008.

You can expect ever more in-depth discussions on business development, investment opportunities and service standards in money transfers. Top industry leaders will share their views on the evolution of the remittance industry. Regulators and government agencies from around the world will reveal the recent and forthcoming changes in the regulatory environment for money transfers and financial services.

IAMTN are looking forward to an exciting conference with over 130 delegates and distinguished speakers.  There will be Networking opportunities during the two days at our exhibition and there will also be a reception for all the delegates, speakers and sponsors on the evening of 17th November.

For more information and confirmed speakers please visit http://mtl2008.iamtn.org

Speaker and Sponsor opportunities: charlotte.giles@iamtn.org

Mexico's central bank, Banco de Mexico, last week announced that remittances have fallen for the first time in the past decade.  A decline of 6.93 percent was reported for the month of July compared to the same period a year ago.

This fall has been influenced by the high inflation in the US, stricter border controls reducing the influx of immigrants, and the currently troubled economy.

Money sent from abroad to families is Mexico's second largest legal source of income after oil.  In 2007 a total of $24 billion was sent compared to $13.6 billion from January to July 2008.

Many local businesses who also provide remittance services have noticed a distinct drop in customers sending money, some even reporting 50% declines.

Concerns have been voiced in Mexico where about 17% of the adult population receive on average $2,250 per year.  This money would normally be used for school fees, food, and building of houses and infrastructure.