Why migrants need transparency on money transfers

“I have sent loads of money to my family over the last years and I am tired of spilling almost 10 percent of it down the drain each and every time.” Emile, a young Cameroonian living in Germany, was amazed to find out that there was a provider offering much cheaper transfers than the one he had used before to send money home. “You might say it is easy to find out which money transfer provider offers the best deal. But often it is not: much of the information needed is not easily or not at all accessible and many different products make it hard to make a choice. You go for the provider you’ve always used.”

Emile’s experience is similar to many. The provision of clear information on providers and products is the key to transparency on the remittances market. Conscious choices of customers promote competition among providers and the creation of new financial products adequately serving migrants and their families. Increased competition among providers and transparency in the market can lead to a reduction of remittance costs in the long run.

With the German remittances portal GeldtransFAIR.de migrants can compare prices and conditions of different providers for more than 20 countries. We collect data every two months and provide it in a user-friendly way. GeldtransFAIR.de forms part of the network of national remittances databases certified by the World Bank. The certificate helps us to show that we are in line with international standards. This builds trust among our users. Their informed decisions on international money transfers can substantially influence the remittances market.

But GeldtransFAIR.de is not only about comparing prices. Informed decisions of migrants on remittances imply something more. Training and knowledge exchange on financial products and on development effects of remittances are just as important. The remittances portal can serve as a platform to exchange experiences and receive training and information on financial and development issues. This is what we have started just now on GeldtransFAIR.de through a first online seminar and chat on remittances and development on October 15th. And there is more to come.

National databases on remittances promote price comparison and they can go beyond. Let’s support migrants’ efforts in sending money home by providing transparent information on prices, by building platforms to exchange experiences and by raising awareness about remittances and development.

This post first appeared on The World Bank Blog

Author: Lotte Nordhus is Junior Technical Advisor in the Sector Project Migration and Development of the Centre for International Migration and Development (CIM)

Image: An employee counts Indian rupee currency notes inside a private money exchange office in New Delhi July 5, 2013. REUTERS/Adnan Abidi