by Joseph Pimentel/Asianjournal.com
LOS ANGELES – The Transnational Institute for Grassroots Research and Action (TIGRA), an immigrant advocacy group protesting the high transaction fees placed on migrant workers’ remittances has made an agreement with a money transfer company and asking for others to follow suit.
TIGRA has set forth a deal with Texas-based Virtual Money Inc. whose leaders hope, will lead to new business standards for the billion dollar remittance industry.
Among the agreements arrived at were that Virtual Money and its authorized Master Agents ICE Holdings Limited (IHL) would provide fair prices of at least 20 percent lower than the industry standard; commit to socially-responsible investing; abide by customer service standards based on transparency and non-discrimination; and adhere to a community reinvestment strategy which allocates up to 10 percent of revenues to projects that assist transnational communities, according to details of the deal announced last Tuesday in Los Angeles,
“This is the standard we want for the whole [remittance] industry,” said Francis Calpotura, executive director of TIGRA. “It has to have a community redevelopment standard that says, ‘we are committed to the communities that we benefit from and that part of our profit has to go back to those communities.’ Virtual Money is the first one to step up.”
Virtual Money uses the digital infrastructure to transact money. Rather than building branches in strategic locations, the company uses their own ATM cards for clients to access, transfer or check their funds. The low overhead costs can afford the company to lower its transaction fee.
“Because of the new technology, there is no reason why people have to pay such outrageous prices. We can do it cheaper, get it to the hands of people faster, and let the consumer know every cost involved in the process,” said Virtual Money Founder, President and CEO Robert Hodgins,
Many foreign countries’ economies like Mexico, the Dominican Republic and the Philippines rely heavily on the amount of money remitted by overseas workers.
The World Bank estimated that overseas Filipino workers (OFW’s) sent home more than $12.4 billion in 2006. There are more than three million OFW’s working in countries like the US, Japan, Saudi Arabia, and Europe.
The Philippines ranks fifth globally in terms of remittances received from its overseas workers,” said Amando M Tetangco, Jr, Governor of the Central Bank of the Philippines (Bangko Sentral ng Pilipinas) in a statement at the 13th Meeting of the World Savings Bank Institute Asia-Pacific Regional Group.
The World Bank revealed that migrant worker remittances reached $260 billion globally in 2006.
Remittance companies’ transaction price ranges from $2.95 up to $12 depending on the amount of money being sent. With billions of dollars being sent home, remittance companies have been cashing in.