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Press Release

11 November 2005

New report launched into the £2.7 billion UK remittance market

Sending money home to friends and relatives in developing countries more quickly, easily and at lower cost is at the heart of a report that will be launched next week by International Development Minister, Gareth Thomas.

Leading banks and money transfer companies, as part of the UK Remittances Working Group, have worked with the government to produce the report, UK Remittance MarketPDF document(1.07 mb). It targets over two million people in the UK who last year sent £2.7 billion to family and communities in the developing world. It gives an overview of the sector and makes several recommendations, which include the creation of a private sector task force to deliver increased competition and choice for the consumer.

Gareth Thomas welcomed the launch of the report and said:

"Remittances are hugely important for people on low incomes in developing countries. Last year, over £100 billion was sent home globally and this money plays a huge role in promoting international development and fighting poverty. Today's report takes us another step towards making the UK a better place for low cost, secure and accessible remittances to the developing world."

The report's authors have put forward several key recommendations to boost the potential of the remittances market and money transfer services in the UK. These cover research and data, customer identification, regulation and good practice from around the globe. Leon Isaacs, Commercial and Marketing Director, Travelex Money Transfer will present the proposals at the event.

The launch event takes place on Tuesday 15th November between 2pm and 3pm at the Royal Institution of Chartered Surveyors, 12, Great George Street, London SW1P 3AD. The event will provide further detailed analysis of the recommendations and an opportunity to meet the report's authors.

International Development Minister Gareth Thomas will be available for interview between 3pm and 3.35pm.

The event will see the launch of a new, easy to use, consumer section on the DFID-supportedExternal linkSend Money Home? website which allows customers to compare money transfer providers on the basis of cost and speed. This is expected to bring lower prices and better service to consumers as a result of increased choice and transparency in the market.

The report also highlights how technology like mobile phones, Automatic Teller Machines (ATMs) and point of sale devices offer the potential for a growth of remittance services. DFID has supported the rollout of these technologies in Africa and Asia, for example the development of mobile phone banking in East Africa and the use of debit cards in South Africa.

For further details about the report and the launch event, contact:

Rhyddid Carter
DFID Press Office
+44 (0)207 023 0533

Notes to Editors:

1. Remittances are amounts of money - typically between £50 and £500 - sent by people working in the UK back to families and friends in other countries. The largest developing country recipients of remittances from the UK are India, Pakistan, Jamaica, China and Nigeria.

2. Global remittances to developing countries are estimated at over £100 billion. They are the second largest global financial inflow to developing countries after foreign direct investment, exceeding international aid.

3. The UK remittances working group was set up in 2004, with public and private sector involvement. The group has the aim of improving remittance services to developing countries from the UK. The group has had wide participation from the private and also public sector. Members of the working group include: HSBC, Citigroup, Travelex, Royal Bank of Scotland, Chequepoint and the Association of Payment and Clearing Services (APACS). Its recommendations include the creation of a task force to draw together research, information and discussion from the industry to help increase remittance flows.

4. Barriers to remittances can include: high charges for small amounts (mainly at major high street banks and building societies), the sender or receiver not having an account (mainly at banks), too long a wait for money to arrive; and collection points for remittances being in inconvenient locations. These barriers are gradually being addressed though, with the Department for International Development, and private sector actors such as Lloyds TSB, Travelex and Chequepoint leading the way in removing them.

5. The report also gives information on the forthcoming European Union (EU) Payments Directive, which aims to create an EU single market in payment services allowing remittance providers to offer services EU wide, and on the Government's forthcoming review of the regulatory regime for Money Service Businesses (MSBs). This review aims to set out the options to enhance current safeguards in the MSB sector, while minimising the burden on industry, managing the risk of driving business underground, and ensuring that the interests of the many legitimate users of MSB services (particularly migrant workers) are protected.

6. A recent DFID survey found that money transfer operators generally offer a cheaper and better service than banks for those wishing to send small amounts to developing countries, although banks are more widely trusted. This survey also found that the cost of sending money transfers varies hugely. For example, the cost of sending £100 to Ghana could range from £3.50 to £35. Sending the same amount of money to India could range in cost from £5 to £40.

TheExternal linkSend Money Home? website has created a momentum in the UK remittances market for improved customer service, with the terms of money transfer services clearly presented, and a positive dynamic within the industry to lower costs, speed-up transfers, and make sending easier.

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