There are inconsistencies in money transfer services

Feb 18, 2019 Letters

Dear Editor,
This letter comes to you in support of Tony Vieira’s letter, Money transfer services fleecing poor Guyanese, which appeared in your February 15, 2019 issue. Tony’s concerns as it relates to the shortchanging of the Guyana dollar by the international money exchange entities should not be rationalized as common business practice.
His commentary and observations that poor people end up shortchanged should not be couched as loss recovery. A cursory visit to one of the exchange sites reveals that sending the same amount of money to countries around the world raises more questions.
A better explanation is needed because the numbers suggest inconsistencies not only in the fee structure but also, and most importantly, in the payout. The appearance that some senders get to keep more of their money and some recipients receive less of their payout should be questioned. Should the poor suffer what they must?
For example, sending $600(USD) from the US to Barbados, Dominica, Grenada, Guyana, and Trinidad will cost the sender an additional fee of $51(USD), while to Jamaica this fee is $23.99(USD). However, this fee will be $15(USD) to Colombia; $26(USD) to China; $5(USD) to France; and $5(USD) to Germany. There is no fee charged for India and the Philippines.
While there may be an argument for money laundering and payment for such services, the inconsistency between countries flagged by the US Department of State does not support such a position.
For the payouts, in Barbados, the exchange rate is equal to the bank rate. However, in Dominica, Grenada, Mexico, and India the rate of loss is less than 1% between the money exchange entity and the corresponding central bank rate.
In Mexico and the Philippines, the recipient would lose around 1% and in Guyana that loss comes to 3% while in Trinidad and Jamaica they lose 4%. In Botswana, the loss is 8%.
My dear Editor, clearly some senders keep more of their money, and some recipients receive less of their money. The argument that rates are fixed by the head office, agents are paid a percentage, and money to pay for tougher anti-money laundering regulations seems necessary but insufficient.
What happens between sender and receiver needs to be understood. Perhaps this is what researchers call the Black Box Effect? Should we wonder why the rich remain rich and the poor receive less?
Thinking through the issues.
L. A. C. Archer

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