Remittance Companies Urged To Reduce Charges To Customers – Davies

Minister of Finance and Planning, Dr. Omar Davies, has expressed concern about the high margin on which remittance companies operate, and the exchange rate at which remittances are converted.
Dr. Davies was speaking at a Luncheon Meeting for Moneygram executives, on Wednesday (Oct. 15), at the Hilton Kingston hotel.
Picking up from an announcement by Moneygram that the cost of sending funds overseas had been reduced to US$9.99 for any amount up to US$300, the Finance and Planning Minister remarked that while there was a reduction, it was not clear by how much, “which tells me that there is possible room for further reduction.
But given the population you are serving, I think that you should re-examine the issue of the margin being charged in the matter of transferring money”.
He argued that the operation of remittance companies was very safe, in that customers had to give them the money before they transferred it, which meant that they were not extending credit to their customers.
Urging therefore, that the principals in Moneygram take a closer look at the margin they are charging, because by and large they are dealing with working class people, Dr. Davies stressed that these sums were very important to them, noting that the percentage, which has to be paid for this service, represented cash being taken from their disposable income.
Dr. Davies also challenged Moneygram to look at the exchange rate at which they converted money, pointing out that the rates, which he had seen applied by some remittance companies, as well as by hotels, were unnecessarily high, claiming that those rates were being kept a secret, except in those offices.
The Finance and Planning Minister said he was saddened by the application of those rates, and would like remittance companies to set guidelines for the application of the exchange rates to be used. He said this was of particular concern to him, given that the Bank of Jamaica published daily, the weighted average exchange rate.
He said while not yet the dominant force in the area of remittance, he had no doubts that the presence of Moneygram’s high-level team in Jamaica was an indication of the extent to which they took their business here and the Caribbean, seriously.
The rate of growth of remittances over the years has surprised most people including myself, Dr. Davies said, and this occurred despite difficulties following 9/11 in the US economy. “We have been pleasantly surprised by the rate of growth of remittances,” he said.
Suggesting to Moneygram that they should think of Jamaica not just as a place where money was transmitted to and from, but also as a place to do business, Dr. Davies informed that Jamaica, perhaps more than any other country in the Caribbean or Latin America, had put in place a liberalized financial framework, which would facilitate operations, such as theirs.
He said they could not have thought of a better place to locate their Caribbean and Latin American Headquarters, and would like to see Kingston and Jamaica in general, as a potential point of additional investment and a place to expand their business.