The Antimonopoly Prosecutor in Chile sides with MSBs on Bank Account Closures

We thank our colleague Carlos Grossman, for the report out of Chile where the Antimonopoly Division of the National Economic Prosecutor Office (División Antimonopolios de la Fiscalía Nacional Económica – FNE)  reports the investigation that took place after an August 2015 complaint by a Forex Firm denouncing seven banks of denying the opening of a bank account. The investigation and the conclusions are very important for the industry worldwide and Mr. Grossman has provided us with the report, so it can be read and used by any company in the industry that is been denied an account.

The Evolving Relationship Between Banks and MSBs

As you recall from the earlier blog, there are many reasons for MSBs to be cautiously optimistic: new banks are opening with a focus on various types of MSBs, regional and community-based financial institutions are gearing up to perform appropriate due diligence on potential clients, online firms who do not require branches for deposits are springing up rapidly and regulators are able to distinguish quality within the MSB industry vs. the historical “one size fits all” approach. The combination of these factors is opening doors for money transmitters, pre-paid providers, 3rd party processors and others in our much-maligned industry.

MONEYGRAM’S CFIUS SITUATION

Let’s first remember. In April 15, 2017, Alibaba’s financial affiliate Ant Financial (Ant) agreed to purchase MoneyGram International, Inc. (MGI) for $18 per share. Ant, which is controlled by the famous Alibaba CEO Jack Ma, increased its price from $13.25 to $18 after RIA’s Euronet put in a bid for $15.20. In order for the deal to pass, the companies need approval from CFIUS.

What is CFIUS? The Committee on Foreign Investment in the United States. Is CFIUS under the watchful eyes of Mr. Trump? Are his America First policies at play here? Yes, definitively.

And we know in the industry, that US RIA’s Euronet is keeping a close eye on that decision. We all are. If the deal goes through every company in the industry will be more valuable… But let’s analyze the situation…

A Shout-Out for a Great Event in Nairobi, Kenya

On Friday, September 22nd, we closed our first Africa Conference. As I mentioned to all participants, the whole process of developing the conference was, from the start, an uphill race, surmounting obstacles and convincing sceptics. But just days before the event, the pieces of the puzzle came in together and a bright and inspiring panorama opened.

Our pre-conference field trip day planned by the IMTC’s team of Paulina & Claudia and Olivia and Rachel from Safaricom M-Pesa and it was executed to perfection. Our aim was to give industry professionals a hands-on experience on the M-PESA product. Many of us have for years spoken about M-PESA with no real personal experience on the merits and details of the service.

DE-RISKING AND THE GREAT UNBANKING CHALLENGE

How De-Risking is changing the face of Financial Services worldwide

In July 6th & 8th the Economist published two articles that, again, raised the de-risking threat discussion to new levels. The July 6th article was entitled “The great unbanking [1] –  Swingeing fines have made banks too risk-averse – It is time to rethink anti-money-laundering rules” and the July 8th one: “Rolling up the welcome mat [2]  –  A crackdown on financial crime means global banks are derisking – Charities and poor migrants are among the hardest hit”. For us in the “low-income financial services provider’s sector” [3] the challenges, from regulatory pressures, rise in compliance costs and most of all, de-risking, are a survival issue.

This article is a broad view of de-risking, my opinions on some of the most recent developments that I have been reading, hearing and witnessing recently as we prepare for the “De-Risking Forum” on Nov 30 at IMTC WORLD 2017 in Miami. For detailed analysis on de-risking, its causes and the implications for FIs, you can find many great articles & documents online.[4]

Family Remittances and “de-risking”: The Case of Mexico

Mexican migrants in the USA are first class Mexicans. They are in general the risk-taker population, hardworking, with a different work ethic compared to the average American worker. They give a different value to their labor and the remuneration that they receive for that effort. Some are prosperous entrepreneurs too. Success stories abound throughout the US. They are far removed from the political campaigns in Mexico, in which they are included, to their regret, in the political speeches with highly demagogic and populist content. They are generally skeptical of the political agendas of migrant associations in the USA. For these reasons, among others, they are most likely to repudiate acts of corruption. They are also highly reasonable users (consumers) of the electronic remittances market.

THE UNBANKED AND THE IMPORTANCE OF NBFIS IN THE US

How the financial crisis, the evolution of Banking and Unbanking and the rise of technology in financial services are all connected

The financial crisis and the rise of technology in financial services, that has led to an increase in the importance of NBFIs (Non-Bank Financial Institutions) in the provision of financial services, has created a number of challenging situations that might seem unconnected but could be associated to the evolution of a new world financial order.

We will explore in this article two books, discuss small loans by NBFIs, mention the work of a California-based fintech and close with links to introduce our next blog, how the unbanking or derisking is also phase of the struggles we are facing as an industry and a major challenge for NBFIs all over the world.

Money transfer comparison sites

The more I learn about money transfer comparison websites, the more I am fascinated by the results that they provide. And they are getting better and better, and they are each finding a way to present their information and develop their own character. Are they being used by end-users? Who, how? Are they been used by companies to see how the competition is pricing themselves compared to them? How consistent are the best priced companies?
All those questions are probably in your mind. I can’t answer all of them but by the end of your read you’ll probably have a better idea of this new side of this industry.

Remittances are down and Money Transfers are up?

Last week, The Global Knowledge Partnership on Migration and Development (KNOMAD1) published its Migration and Remittances Brief  #27 (April 2017) prepared by Dilip Ratha, Supriyo De, Sonia Plaza and the rest of the team2 of the Migration and Remittances Unit of the Global Indicators Group of the World Bank.

As I mention in the IMTC conferences, these great briefs are the basis for the information I use for my presentations and courses and by far the best information that is collected in the world on remittances.

This is Part 1 of a compendium/overview of what I find more important for the industry in this Brief; I hope it’s a helpful guide in case you have not seen it yet.

Making Way for Digital Agents

A new trend is ready to reinvigorate the remittance industry

The International Money Transfer & Payments industry has always relied on a large network of brick & mortar agents, both in the sending side of a corridor as well as in the receiving side. It is more true in the sending side, where mom & pop ethnic stores have dominated the landscape providing good and reliable services to migrants in many cities & towns in the world. Migrants trust them and even if they are losing ground to retail chains agent networks and other more corporate store chains, they still handle the large majority of orders sent in the US, Europe and the Gulf.

Western Union, MoneyGram, Ria Money Transfer have always published their agent number as a sign of the growth of their collection (on the sending side) & distribution network (on the paying side).

How is technology changing the remittance industry?

In the process of building the RemTECH Awards http://bit.ly/RemAwards1 and asking ourselves what innovation in the remittances industry meant, I searched the internet and talked to colleagues, both in the traditional financial services sector, bank and non-bank, as well as in fintech start-ups.

I began with fintech and what is truly interesting is that there is a broad understanding of what fintech is but almost everyone doesn’t see eye-to-eye in the details. With no boundaries of how much technology has to change a financial service or a product or how much disruptive the company – or the idea is, to be labeled a “fintech”, almost anyone could call themselves a fintech nowadays if it applies technology, in a large measure, to all its processes.

How is technology changing the remittance industry?

Ant Financial’s & Euronet’s Bids for MoneyGram

(update)

MoneyGram and Ant Financial Services Group announced on April 17 that the companies have entered into an Amended Merger Agreement under which MoneyGram will merge with Ant Financial. Ant increased the offer price from $13.25 per share to $18.00 per share in cash (The transaction is valued at approx. $1,204 million). The operation will be completed in the Fall of 2017. It has gained antitrust clearance from the US government and the filing of state licensing approvals has begun. MGI will operate as an independent subsidiary of Ant Financial and retain its brand, management team, IT infrastructure and headquarters in Dallas. (http://bit.ly/newMGI-Ant)

IMTC LATAM 2017 Afterthoughts

Never before in an IMTC Conference we have had so many representatives from such a large number of sectors of society: politicians, ex-politicians, researchers, academics, pollsters, migration specialists, opinion makers, journalists, social workers, representatives of NGOs, cooperatives, “Cajas” (community banks), workers’ banks, entrepreneurs, remittance companies directives and commercial bank executives.

I think that three factors contributed to this outcome. The first…

Reinventing Remittances with Bitcoin

Stories from the startups on the front lines from Luis Buenaventura

Luis Buenaventura and his team at Bloom are passionate pioneers of the Bitcoin remittance industry as well as its most enthusiastic observers, and this book is their contribution back to this growing community.
Luis has spent the last few years focusing exclusively on cryptocurrency as a mechanism for cross-border money transfer, and he has managed to meet and learn from many of the other Bitcoin remittance players out there. Reinventing Remittances is a collection of conversations, essays, and real data from the field, and is illustrated with tons of graphics and photos.
The digital edition can be downloaded for free!

The Taxing of Remittances in the US

Georgia & Iowa move to leverage a tax on remittances – Financial Institutions are reacting

In a previous blog (in Spanish), posted in the midst of the many reporter calls, especially from Latinamerica (driven by the anxiety over the migration policies of the new US Trump administration), I mentioned the US legislators drive to tax remittances in the US. The State of Oklahoma is taxing remittances for some years now ($5 up to $500 and 1% after that). Several other States such as Georgia and Iowa are moving on this direction and the industry is watching. In the federal level there are also some initiatives being proposed. in an effort to fund the border wall.

ANNOUNCING THE REMTECH AWARDS

THE FIRST AWARDS TO BRING FINTECH INNOVATION ON REMITTANCES FORWARD

Selection is now open to the RemTECH Awards!. Nominees will be announced at the IMTC USA 2017 in San Francisco on June 13 and winners will be announced and awarded at the Global Forum on Remittances, Investment and Development at the GFRID2017 in New York on June 15. The GFRID2017 is organized by the International Fund for Agricultural Development (IFAD), the World Bank and the United Nations Department for Economic and Social Affairs (UN-DESA) in New York City. The International Day of Family Remittances (IDFR) will be celebrated on June 16 in the context of the GFRID, at the United Nations headquarters. See Press Release

The shifting views on family remittances

After a series of media interviews a couple of weeks ago, in a trip to Guatemala, I realized in a moment that I was witnessing a change in the public perception of remittances that I had not grasped before. Answering one by one journalist questions, it was unquestionable that I was witnessing a shift that I had not noticed before. After thinking about it, I could say that the shift is global although that doesn’t mean that a shift is happening in the same way or at the same time in every region or country in the world. Having been a part of the remittance industry for three decades I suddenly saw it very clearly. But I don’t want to get ahead of myself so let’s back up a little.

Las amenazas de Trump – Remesas, impuestos, migración, deportaciones y la construcción del muro

Remesas, impuestos, migración, deportaciones y la construcción del muro

Durante las primarias presidenciales republicanas del año pasado, Donald Trump expuso su propuesta de cómo forzar a México a pagar por el muro de 1,000 millas en la frontera entre Estados Unidos y este país. Los periodistas Bob Woodward y Robert Costa del Washington Post publicaron en Abril 5 de 2016 la noticia (http://wapo.st/2jbWHFn) en la cual Trump manifestaba su intención de amenazar a México con “cortar el suministro de remesas”. Trump envió en esta ocasión un memorando de dos páginas…

Press Release: IMTC LATAM 2017

Miami, January 5, 2017 – IMTC, the premier events of the International Money Transfer & Payments Industry, has announced today that its first remittance & migration conference of 2017 will be held in Antigua, Guatemala at the Porta Hotel. IMTC LATAM 2017 will be it’s first conference in Central America and will draw attendees from the Americas & Europe.

Remittances to Guatemala will surpass US 7 Billion for 2016, an all-time high. Remittances to Guatemala have grown steadily since 2010 with an average growth of 6% per year, outperforming most of the countries in the region. But also El Salvador, Honduras and even Mexico has seen remittances grow in 2016, all of them reaching all-time highs. Remittances to Honduras are expected to reach 4 billion while El Salvador could reach 4.5 B when year-end statistics are published. Higher incomes in the US and Trump fears are cited as reasons for the increases.

THE TRUMP MIGRATION POLICIES THAT MIGHT AFFECT THE INDUSTRY

Fears abound amidst growing speculation on what Trump’s new government will mean for migrants in the US and for Mexico and its remittances life-line.
I have been asked by many colleagues on what the Trump administration will mean to the industry and to remittances in general and I have basically kept quiet, scanning the news for its cabinet nominations to catch a glimpse, under all the noise and non-sense, of what could it all mean for our industry and to all the clients we serve in the United States. And with so much influence in the world, what happens in the US will surely affect the industry in many countries.

HELPING REMITTANCE FAMILIES IN NEED

OVERSEAS WORKERS IN SAUDI ARABIA
When migrant workers are left stranded, should governments step in?

The situation in Saudi Arabia for overseas workers is critical. During the oil boom migrant workers went from 5.3M in 2000 to 10.2M in 2015 according to UN figures. More than 1M have lost their jobs in 2016 and remittances are dropping more than 20% every month compared to last year’s figures. Shivaji Sarkar wrote in The Pioneer: “The hiking petroleum price by producing nations itself had caused upheaval and as different energy sources are now being developed, it is leading to an Arabian night.” An Arabian night for the construction companies that are laying off thousands of workers and the OWs that they employ…

Migration & Remittances: Global Trends

On the occasion of the International Day of Family Remittances, June 16, 2016, KNOMAD, the WORLD BANK and IMTC invited the general public to a one-hour virtual session entitled: Migration & Remittances: Global Trends, Outlook and State of Play. Speakers were Dilip Ratha, Head, KNOMAD and Lead Economist, Migration and Remittances, World Bank and Hugo Cuevas-Mohr, Director, IMTC Conferences and Mohr World Consulting. Here are the Voice Recordings and the available transcripts.

We also want to THANK all the institutions that signed the pledge and we hope to make the IDFR 2017 a great success!
Part 1: Dilip Ratha | Part 2: Hugo Cuevas-Mohr | Part 3: 5 Questions with Answers

DÍA INTERNACIONAL DE LAS REMESAS FAMILIARES

sabes que el 16 de junio ha sido declarado el DÍA INTERNACIONAL DE LAS REMESAS FAMILIARES por 176 gobiernos en el mundo?

La primera celebración se llevó a cabo el año pasado en el GLOBAL FORUM ON REMITTANCES AND DEVELOPMENT, del 16 al 19 de junio en Milán, Italia como parte de la World Expo sobre alimentación. El Fondo Internacional para el Desarrollo Agrícola (IFAD), una agencia especializada de las Naciones Unidas, ha sido el promotor de este día internacional desde su inicio.

INTERNATIONAL DAY OF FAMILY REMITTANCES-IDFR

Do you know that the 16th of June has been declared the INTERNATIONAL DAY OF FAMILY REMITTANCES by 176 governments in the world?

The first celebration took place last year at the GLOBAL FORUM ON REMITTANCES AND DEVELOPMENT, June 16-19 , 2015 in Milan, Italy as part of the World Expo. IMTC was part of the celebration where the international community recognized the work of the private sector in facilitating the sending of remittances, in developing cost-effective and accessible financial transfer services, and encouraged the industry to link these flows to a range of financial services and products for migrants and their families.

Our industry, our image, our trade groups…

As I leave Barcelona after IMTC EMEA 2016 this past May 18-20 and I reflect on the industry, I can’t help but feel proud of the work we do at IMTC and the people we serve. Even talking with long-time industry warriors who are tired of the increasing complexity of the sector, I am a positive person and I can’t help but look back on where we started, around 30-35 years ago, and where we are now. Yes, we face many problems: bank discontinuance, regulatory inconsistency, a somewhat tainted image, weak trade groups, just to name a few. But we are a strong and growing sector with new products and services, new client sectors and technology developments that are impressive. Let’s take a partial look at ourselves…

Barcelona recibe a la industria mundial de remesas y transferencias internacionales de dinero en Mayo

Las remesas en España tienen una historia muy particular. En la actualidad y según el IFAD en Roma (Fondo Internacional de Desarrollo Agrícola – FIDA en español) España es el sexto país europeo en volumen saliente de remesas con un total anual de 9.600 millones en el 2014. Los datos del Banco Mundial (Factbook 2016) sitúan el total para España en 8.794 millones. Rusia se ubica en un primer lugar con  20.600 millones de dólares, seguido por el Reino Unido (17.100 millones), Alemania (14.000 millones), Francia (10.500 millones), Italia (10.400 millones). Los inmigrantes en Europa enviaron 109.400 millones de dólares (97.500 millones de euros) en 2014 a sus familias, alrededor del 25% de las remesas mundiales.

GAO Reports on International Remittances

I think it is very important that every person in this industry reads the GAO Report published on February 16th, 2016, entitled INTERNATIONAL REMITTANCES: Actions Needed to Address Unreliable Official U.S. Estimate – Highlights Page (1 page), Full Report (62 pages). A second report published the same day is entitled INTERNATIONAL REMITTANCES: Money Laundering Risks and Views on Enhanced Customer Verification and Record keeping RequirementsHighlights Page (1 page), Full Report (59 pages), Accessible Version (62 pages).

The 10 Most Important Issues – 2015 Edition – 10

Hugo Cuevas-Mohr puts together every year the 10 Most important Issues for the industry. To download the PDF go to Download/IMTC Publications.

Bitcoin, as a remittance tool, is now being used by a few pioneer firms, while the overall acceptance of the blockchain protocol as a significant invention has shifted the rhetoric about VCs for the better. With MTBIT, at IMTC, we have been actively seeking individuals and firms using blockchain protocols to offer solutions to cross-border customers.

The 10 Most Important Issues – 2015 Edition – 9

Hugo Cuevas-Mohr puts together every year the 10 Most important Issues for the industry. To download the PDF go to Download/IMTC Publications.

The rise of P2B, B2B, and Forex services in the industry is making the “Payments” side of the International Money Transfer & Payments Industry more dynamic and more important, overall, with new services, new entrants and new offerings. The P2P money transfer and remittance market has been historically closely linked to the Forex Market, although regulations in many countries, as well as currency controls due to AML compliance concerns, broke the bond and led to the demise of many Forex firms, most prominently, the “casas de cambio” in Latin America.

The 10 Most Important Issues – 2015 Edition – 8

Hugo Cuevas-Mohr puts together every year the 10 Most important Issues for the industry. To download the PDF go to Download/IMTC Publications.

The continued decline in the price of oil is affecting remittances worldwide, although the effects are varied, depending on the region of the world. But even if oil prices fell to their lowest levels in a decade, remittance outflows from the GCC were not heavily impacted during 2015. Remittances to Egypt, Jordan, and Yemen, with over 70% coming from the GCC, were not affected.