1 January 2014 RemittancesmarketintheNetherlands DaniëlledeWinter LaudraArchangel GerdJunne JaneMartie<Chatlein
2 2 REMITTANCESMARKETINTHENETHERLANDS Preface ThepresentstudyhasbeeninitiatedbytheMinistryofForeignAffairsoftheNetherlands and has been financed by the Ministry and by contributions from the Dutch Banking Association (NVB) and from the Dutch Central Bank (DNB). It has been carried out in the period between September and December The research team was supported by a steering committee, which assisted with the gathering of information, interview contacts, andcriticalcomments.membersofthesteeringcommitteewerelidynavis,jaapsmit,and RichardDonsfromtheMinistryofForeignAffairs,MeikeKramerfromtheDutchMinistryof Finance,AyseZoodsma<Sungur(DNB),MarcvanderMaarel(NVB),andVyashMisierfrom the Dutch Association of Money Transfer Institutions (NVGTK). In addition, we received valuable advice and contributions from Nanette Farwerck<Bergwerf (INTL Global CurrenciesLtd).Wethankthemembersofthesteeringcommitteeandouradvisorsfortheir active support and contribution. The authors, however, are solely responsible for any mistakeormisunderstanding,whichthestudymaycontain. Amsterdam,January TheNetworkUniversity(TNU),Amsterdam,TheNetherlands,January2014
3 REMITTANCESMARKETINTHENETHERLANDS 3 ExecutiveSummary 1. ThisstudyhasbeeninitiatedandpartlyfinancedbytheMinistryofForeignAffairs ofthenetherlandstocontributetothe 5x5 initiativeoftheg20toreducethe costs of remittances to an average of not more than 5 percent of the transfer amount within five years. The study has been copfinanced by the Dutch Central Bank and the Dutch Banking Association. Both organizations have also been supportiveinaccessinginformation. 2. ThefocusofthestudyisonremittancestofourAfricancountries,sincecostsof remittances to SubPSahara African countries are still the most expensive due to issues related to efficiency, competition, innovation and compliance in both sending and receiving countries. The four countries selected show very different characteristics:ethiopiadoesnothaveaconvertiblecurrency,ghanatookstepsto introducemobilepayments,nigeriawillsupplyeverynewcitizenwithamastercard, andsomalialacksafullyfunctioningbankingsystem. 3. Dutch banks play a limited role in the remittances market. Money Transfer Organizations are the main players with regard to money transfers by migrants throughformalchannels.averylargepartofremittances,however,issentthrough informal (not necessarily illegal) channels, which are seen as speedy, reliable, and nottooexpensivebyremittancesenders. 4. Technologiesfornewformsofinternationalmoneytransferdevelopataveryhigh speed, and many new players build up positions, not only telecommunication companies,butalsothe bigpowers inmobilecommunications,includinggoogle, FacebookandApple.IntheNetherlandsonlyfewalternativeserviceprovidersoffer theirservicestothedutchmarket. 5. TheNetherlandsformaclassicalexampleofthe handicapofaheadstart :The very fact that the Netherlands are relatively advanced in cashless (electronic) payments,comparedtomanyothereuropeancountries,hasreducedtheurgencyto agree on common standards for mobile payments and to actively support
4 4 REMITTANCESMARKETINTHENETHERLANDS innovations in the sector. The Netherlands therefore run the risk to become a countrywithcomparativelyhighremittancespricesinthefuture. 6. Money transfer operators are under pressure from many sides to reduce their tariffs. They will still hold a strong position in the future, because of their widespread networks of agents in the Netherlands and in receiving countries, the stillgeneralpreferenceofclientsforcash<basedtransactions,andbecauseoftheir willingness to engage in new forms of cooperation with telecommunication operators. 7. Theinformalsectorprobablystillplaysaverylargeroleandwillprobablyprofit fromstricterregulationsofinternationalpaymentsatglobalandeuropeanlevel. Theinformalsectorisbynomeansa traditional sector;ithasquicklyadoptednew means of communication and transfers ( e<hawala ). Formal channels could probablylearnfrominnovativeinitiativestakenbyactorsinthissector. 8. Migrants apply many other criteria than price alone in their selection of remittances channels. Lower prices by some players on the remittances market wouldthereforenotleadtoquickshiftsandafastreductionofremittancescosts. Linkagesofremittancestootherfinancialproducts(insurance,pensions,mortgages, direct payment of bills in the country of origin) could make specific remittances channelsmoreattractive.thesevalue<addedservicesseemespeciallyattractiveto highlyeducatedand/orsecond<generationmigrants. 9. The everpstricter regulation of international money transfers is regarded as no longer proportionate to the risks of money laundering and the financing of terrorist organizations, by many professionals in the market, and as not very effective to mitigate these risks. It threatens to become counterproductive in postponing the introduction of mobile money with an easy to follow trail of information on sender and receiver, pushing remittances flows into informal channels, and unnecessarily increasing the costs of formal remittances service providers.
8 8" REMITTANCES"MARKET"IN"THE"NETHERLANDS I."Introduction" Withtheincreaseininternationallabourmobility 1,andincreasingeasewithwhichmoney can be sent around the globe, the worldwide volume 2 of remittances 3 has grown tremendouslyinthepasttwodecades.thevolumeofremittancesin2012reachedusy$529 billionaccordingtotheworldbank 4 (havingquadrupledfromusy$132intheyear2000), which is more than four times the total volume of official development aid. 5 Remittances keepmillionsofpeopleoutofpoverty,stimulatedemandinlocalmarketsinthereceiving countries,andfinancethecreationofcompanies. 6 Someevensay, Remittancesmaywell bethebestsinglewaytofomentdevelopment. 7 However,notallthemoneymigrantsspendonremittancesreachesthereceivers.Sending moneycostsmoney.theaveragecostofsendingmoneyhomeisactuallyabout10percent of the amount sent by migrants. 8 If these costs could be halved, an additional amount of roughlyusy$20billionwouldreachthereceivers,ywhichismorethanthreetimesthetotal Dutchdevelopmentaidbudget. 9 Reducingthepriceofmoneytransfersisthereforeapolicypriorityofmanygovernments. AttheirJulymeetingin2009,theHeadsofStatesG8haveproclaimedthe 5x5objective : The global average costs of transferring remittances should decline from 10 percent to 5 1 AccordingtotheUNDepartmentofEconomicandSocialAffairs(UNYDESA)232millionpeople,or3.2percentof theworld spopulation,liveabroadworldwide,comparedwith175millionin2000and154millionin1990. (FiguresreleasedaheadofthehighYlevelglobalsummitonmigrationanddevelopmenttobeheldbytheGeneral AssemblyinNewYorkon3and4October2013,see ). 2 Thepublishedfiguresdonotonlyreflecttheincreaseoftransfers,butprobablyalsoanincreasingpercentageof paymentsthatflowsthroughformalchannels,andthusahigherpercentageoftransfersthatareincorporated intoofficialstatistics. 3 Remittancesareforthepurposeofthisreportperceivedasprivatecapitalflowsmadebymigrantstotheir familyandfriendsinthecountryoforigin. 4 WorldBankPressreleaseof19April2013,seehttp://www.worldbank.org/en/news/pressY release/2013/04/19/worldybankylaunchesyinitiativeyonymigrationyreleasesynewyprojectionsyonyremittanceyflows. 5 MembercountriesoftheDevelopmentAssistanceCommittee(DAC)oftheOECDprovidedUSY$125.6billionin netofficialdevelopmentassistance(oda)in2012.see 6 Thisstudywillnotdiscusstheimpactofremittances.Forliteratureonthattopic,seeNijkampetal.(eds.), NancyBirdsall,President,CenterforGlobalDevelopment,citedinKitroeff Averagepercentwasestimatedtobe9.3%in2011,Yactuallyhigherthanin2010,YseeDiaKamgnia& Murinde2012,Table1:Evolutionofremittancecostsworldwide. 9 PresentationWorldBankEUDEVCOmeeting15November2013
9 REMITTANCES"MARKET"IN"THE"NETHERLANDS" 9 percentin5years. 10 In2010,theG20committedtoa significantreductioninthecostsof remittanceservices andestablishedadevelopmentactionforremittances. 11 TheWorldBankhasbeenmonitoringthelatesttrendsintheaveragetotalcostofmigrant remittance services worldwide since the adoption of the 5x5 initiative. For the second quarter of 2013, it reported that the global average total cost for sending remittances continued to decline and now stands at 8,85 percent. The Dutch average was measured slightly lower than the global average at 8,51% in 2012 based on the World Bank s RemittancesPricesWorldwideindex(Isaacs,2012).However,theWorldBankstatisticsalso showthatstillgreateffortisneededtoreachtheexpectedgoalof5percentagepointsin5 yearstime. It is in line with this objective that Minister Lilianne Ploumen promised the Dutch parliament 12 tostudywaysandmeanstoreducethetransfercostsandtoengagewiththe relevantstakeholdersinthenetherlandstobringthecostsdown.thepresentstudyispart of this endeavour. It has been initiated by the Dutch Ministry of Foreign Affairs and is supportedbythedutchcentralbankandthedutchbankingassociation. The objective of this study is to identify steps that can be taken to reduce the costs of transferringremittances.several(groupsof)actorssharetheresponsibilityforreachingthis ambitiousgoal:theremittancesservicesproviders(rsps),thegovernmentsofthesending and of the receiving countries, and the migrant communities themselves. The study will thereforepresentarangeofrecommendationsforeachofthem. The Migration and Remittances Factbook published by the World Bank (2011) defines remittancesasthesumofworkers remittances,compensationofemployees,andmigrants transfers. 13 Basedonthisdefinition,theWorldBankhascompileddataonremittancesfor thepastdecades.yet,inpractice,manycountriesgathertheirdataindifferentways,which SeetheletterofMinisterLiliannePloumenandSecretaryofStateFredTeeventotheDutchParliament (TweedeKamer)of3July2013on VoortgangsrapportageMigratieenOntwikkeling.Seealsothe Besluitvan deministervoorbuitenlandsehandelenontwikkelingssamenwerkingvan9november2012,nr.dcm/may 154/2012,totvaststellingvanbeleidsregelsensubsidieplafondMigratieenOntwikkelingsprogramma Workers remittancesarecurrentprivatetransfersfrommigrantworkerswhoareconsideredresidentsofthe hostcountrytorecipientsintheworkers countryoforigin.ifthemigranthaslivedinthehostcountryforless thanoneyear,theirentireincomeinthehostcountryshouldbeclassifiedascompensationofemployees. Migrants transfersarethenetworthofmigrants assetsthataretransferredfromonecountrytoanotheratthe timeofmigration(foraperiodofatleastoneyear).(frommigrationandremittancesfactbook2011,xviyxvii)
10 10" REMITTANCES"MARKET"IN"THE"NETHERLANDS leadstodifferingresultsandinterpretationsofremittancesdata.thedutchcentralbankfor example does not have a specific definition for remittances, but refers to Eurostat s interpretation,whichissimilartobutnotthesameastheworldbank s.thefiguresonthe averagepriceofsendingremittancesgivealsorisetoconceptualconcerns.theworldbank calculates these prices on the basis of an unweighted average of the prices quoted by differentremittanceserviceproviders,irrespectiveofthevolumeoftheirtransactions.this canprovideadistortedpictureofthepricethatmigrantspayonaverage,e.g.ifespecially highorlowpricesareincludedofproviderswhoareonlyresponsibleforaverythinflowof remittances.suchconsiderationsneedtobetakenintoaccountwhenreadingthroughthe report,andhavebeentakenintoconsiderationwherepossible. Thefocusofthisstudyisonfourremittancescorridors,linkingtheNetherlandswithEthiopia, Ghana,NigeriaandSomalia.Reasonsforthisselectionarethat (a) thetransfercostsforremittancestoafricaarethehighest,comparedtootherworld regions 14, (b) a number of recent studies 15 have covered other corridors that are important for remittancessentfromthenetherlands. ThisstudywillprovideanoverviewoftheremittancesmarketintheNetherlandsinpartII. PartIIIpresentstheresultsofinterviewswithmigrantsfromthefourchosencountriesand of the main issues discussed during a number of focus group meetings. Against this background,partivwillanalysethedifferentmeasuresthatcouldbetakentoreducethe costsofremittances.finally,partvwillpresentrecommendationsforthedutchgovernment, forfinancialinstitutionsinthenetherlands,andformigrants. 14 KamerbriefVoortgangsrapportageMigratieenOntwikkeling,3July RecentstudiesonotherimportantcorridorsincludethestudiesontheNetherlandsYMorocco(vanWaes,2009), thenetherlandsysurinam(ungerandsiegel,2006)andthenetherlandsyafghanistan(evtimova&koekoek,2013).
11 REMITTANCES"MARKET"IN"THE"NETHERLANDS" 11 "II."Remittance"market"in"the"Netherlands" Each day 440 immigrants are registered in the Netherlands. They make up approximately 21% of the total population in the Netherlands (CBS reports a little over 3,5 million immigrants living in the Netherlands in May 2013). Many migrants from developing countriesremainconnectedtotheircountriesoforigin,andoftenareexpectedtofinancially supportthoseleftbehind.tofacilitatethetransnationalfinancialneedsofforeignresidents in the Netherlands, a market has developed that meets their requirements: offering remittancesservicesthatallowmigrantstotransfertheirfundstofamilyandfriendsintheir countriesoforigin. However,thereislittlerecentdataavailableonthedifferentremittancecorridors,onthe typesofservicesonoffer,orontheregulationsthatensuresoundbusinesspracticeinthe remittancesmarketinthenetherlands 16.Thischapterwillthereforezoominonthesethree factorsthatmakeuptheindustry:(i)sizeofcorridors,(ii)remittanceserviceproviders,and (iii)regulations. II.1" Size"of"remittances"corridors" ThetotalvolumeofremittancesflowingoutoftheNetherlandsin2012hasbeenestimated to amount to US million 17. In the most recent World Bank Factbook (2011), the Netherlands was ranked 10 th out of the global top remittanceysending countries. The ten most important remittance corridors served by the Dutch market (in the first quarter of 2013)werethefollowing 18 : 16 PreviousstudiesontheremittancemarketintheNetherlandsareMohogu(2006) AfricanRemittanceMarket inthenetherlands,ncdo(2009) HetGeefgedragvannietYwesterseallochtonen,Kosse(2013) Migrants choice ofremittancechannel:dogeneralpaymenthabitsplayarole?,andthecorridorstudiesreferredtoinfootnote ~piPK: ~theSitePK:476883,00.htmlY>annualremittancesdata(outflows) 18 DataprovidedbyDeNederlandscheBank.
12 12" REMITTANCES"MARKET"IN"THE"NETHERLANDS Top"10"send"countries"Q1V2013" Corridor" Total"volume"in"EUR" 1 Morocco ,69 2 Surinam ,47 3 China ,08 4 Philippines ,07 5 Turkey ,05 6 DominicanRepublic ,90 7 Bulgaria ,73 8 Colombia ,70 9 Ghana ,35 10 Brazil ,52 Source:DNBstatistics Three of the corridors in the top ten represent the biggest migrant populations in the Netherlands,namelyTurkey,SurinamandMorocco,asshownbelowinthetable. Top"3"migrant"populations"Q1V2013" Population" Total"#"in"the"Netherlands"" Turkey Morocco Surinam Source:CBSdata In this study, specific attention goes out to four corridors in SubYSaharan Africa, namely Ghana, Nigeria, Somalia and Ethiopia. CBS statistics show that Somalis form the largest groupresidinginthenetherlands,andthenigerianpopulationisthesmallestoutofthefour corridorsunderstudy.
13 REMITTANCES"MARKET"IN"THE"NETHERLANDS" 13 " Population"statistics"for"SubVSaharan"Africa"corridors"Q4V2013" Population" Nigeria" Somalia" Ethiopia" Ghana" TotallivingintheNetherlands Male Female st"generation"immigrants" 1stgenerationimmigrant nd"generation"immigrants" Total2ndgeneration Oneparentbornabroad Bothparentsbornabroad Place"of"residence" North East South West Source:CBSdata Thesentamountinthefirstquarterof2013forthefourcorridorsunderstudyamountto thefollowingnetvolumeineuro: Four"SubVSaharan"Africa"corridors"Q1V2013 Corridor" Total"volume"in"EUR" 1 Ghana Nigeria Somalia Ethiopia Source:DNBstatistics TheDutchCentralBankdidcommentthatthesevolumesincludepotentialtransfersthatfall outside of the official definition of workers remittances. 19 This could include business investmentsandentrepreneurialfinancialactivities. 19 TheIMFandWorldBankhavedefinedworkers remittances,asdefinedbytheimfinthebalanceofpayments Manual,arecurrentprivatetransfersfrommigrantworkerswhoareconsideredresidentsofthehostcountryto recipientsintheworkers countryoforigin.often,thedistinctionbetweenthetwocategories compensationof employees or workerremittances appearstobeentirelyarbitrary,dependingoncountrypreference, convenience,andtaxlawsordataavailability(migrationandremittancesfactbook2011).
14 14" REMITTANCES"MARKET"IN"THE"NETHERLANDS II.2" Remittance"services"providers" Migrants in the Netherlands have full access to the financial system and have various optionsforsendingmoneytotheirhomecountries.first,theycansendremittancesusing standardinternationalmoneytransfersofferedbybanks,althoughnoneofthedutchbanks offersdedicatedremittanceservices.however,therearevariousforeignbanksactiveinthe Netherlandsthatprovidearangeofremittanceservices. Second, remittances may be sent through Money Transfer Operators (MTOs) that are officiallyregisteredunderthefinancialsupervisionact(wetophetfinancieeltoezicht)and subjecttothemonitoringbythedutchcentralbank,dnb.mostcommonlyusedmtosin thenetherlandsarewesternunionandmoneygram.inadditiontothesetwolargeplayers, somefifteenotherofficiallyregisteredmtoswereactiveinthemarketatthebeginningof Inaddition,newplayersareaccessingthemarketplaceandofferingtheirmoneytransfer servicesvianewtechnologies.however,eyserviceprovidersandmobilemoneytechnologies havenotyetpenetratedthedutchmarketsignificantly.industryplayerssuchasazimoand Xoom,whicharepromisingintheUKandUS,forexample,currentlydonot(yet)servethe market in the Netherlands. Still, as eyservices are expanding their reach over the coming years,theirservicesareworthinvestigatingtounderstandbetteritspotentialandexpected trends. And lastly, several informal organizations offer remittances services in the Dutch market (Kosseetal2013:9).Offeringservicesthatrequirefewidentificationrequirementsandlittle costs,informalchannelsarestillwidelyusedbymigrantstotransfermoneyacrossborders. These types of service providers are categorized as Remittances Services Providers (RSP), whicharedefinedasanybusinessthattransfersmoneyacrossbordersforanindividual.the descriptionincludesmtos,banksandalternativeserviceproviders(suchaseyservicesormy services).inthefollowingsectionswewillgointoeachtypeofserviceprovider.
15 REMITTANCES"MARKET"IN"THE"NETHERLANDS" 15 II.2.1MoneyTransferOrganizations MTOsontheDutchremittancemarketarethoseofDutchoriginandforeignMTOs,which haveenteredthedutchmarketviathepassportingregime(forfurtherdetailsonregulatory requirements please refer to II.4). There are approximately 900 registered payment institutions throughout the Netherlands. Most of them are agencies from Western Union andmoneygram.inadditiontothesetwolargeplayers,some15otherofficiallyregistered MTOswereactiveinthemarketatthebeginningof Thepiechartbelowshowsthe fivemostpresentmtosinthedutchmarket. Main"players"remi[ances"market"in"the"Netherlands" WesternUnion MoneyGram 330 SURIYCHANGE MoneyTrans 200 KaahYExpress ThethreeMTOsthatholdthelargestmarketshareintheNetherlandsareWesternUnion, MoneyGram,andSuriYchange 21.Thesethreemarketleadersallhavetheirownspecialization, offertheirservicesworldwideandarefocusedonspecificcountries. ImportantcorridorsforthefivemostwellknownMTOsofferingservicesintheNetherlands are 22 : Marketshareinformationisnoteasilyobtainedduetothecompetitivenatureofthedata.Thereforethe InformationhereisobtainedfromseveralinterviewsconductedbymarketplayersintheNetherlands. 22 Informationobtainedfrominterviews
17 REMITTANCES"MARKET"IN"THE"NETHERLANDS" 17 Strengths"of"MTOs"in"the"Netherlands MTO" Corridor" Strength" Western"Union" Money"Gram" SuriVChange" Moneytrans" KaahVExpress" Somalia,Ethiopia, Ghana,Nigeria Ethiopia,Ghana, Nigeria Somalia,Ethiopia, Ghana,Nigeria Ethiopia,Ghana, Nigeria Somalia,Ethiopia, Ghana,Nigeria Speed,pricing,reliability,physical accessibility,lowfeerates,simplicity Speed,pricing,physicalaccessibility,lowfee rates Speed,pricing,transparency,lowfeerates, simplicity Speed,pricing,reliability,lowfeerates, targetedservices Speed,pricing,physicalaccessibility,lowfee rates MTOsarguethatthecurrentmodelforremittanceserviceshasprovenmosteffective,and thusadoptedacrossthesector. Serving(the(Dutch(market TheMTOsaimpredominantlyatmigrants,whosendmoneytosupportfriendsandfamily, and/or(international)studentswhocometowithdrawmoneythathasbeensentbyfamily. Furthermore,MTOsreportthatentrepreneursalsomakeuseoftheirservices.Theseclients makeuseoftheirservicesforbusinesstransactions.migrantsarespecificallyapproachedin theirrespectivelanguagesorin Dutch. MTOsmarkettheirservicesthroughthe media,at churchesormosques,oratfestivalsandconcerts.clientsarealsoreferredtomtosbyword ofmouth. ( ClientscanvisitanaffiliateoranagentofaMTOorcanmakeuseoftheInternet.MTOstry to expand their accessibility for their target groups by joining in partnerships in both the Netherlands and abroad. Accessibility is important because MTOs realize that travelling coststimeandmoneyfortheirclients.onaverage,peoplecancollectthereceivedsumafter 10Y20minutes. NoneoftheMTOsintheNetherlandscollaborateswithbanks,whilethisdoesappeartobe thecaseinothercountries.however,inthebeginningof2014,westernunionwillstarta pilotprojectincollaborationwiththeroyalbankofscotland/abnamro.thenatureofthe
18 18" REMITTANCES"MARKET"IN"THE"NETHERLANDS pilot will be revealed in the first quarter of And, Moneytrans does promote banky relatedservices,suchastherecentofferoffreeservicesforbankytoybankdepositswithin24 hours to the Philippines. Recently other types of partnerships have emerged such as the cooperationbetweenmoneygramandpostnl,allowingthedutchpostalnetworktooffer remittanceservicesthroughtheirnetwork. 23 The MTOs have reported to be satisfied with the workings of the Dutch market. Factors attributed to their satisfaction are (i) space to grow, (ii) a healthy competition and (iii) enoughroomforthesmallermtos. 24 MTOsstatethattheyfeelitisimportanttostickto laws and regulations. The laws and regulations such as the European Payment Services Directive(PSD)andtheDutchFinancialSupervisionAct(Wft),towhichMTOsmustabide, havepositiveyetalsonegativeeffects.inpartii.4wewillturntotheregulatoryframework inmoredetail. " Effects"of"laws"and"regulations" Positive"effects" Servicesarewellstructured Offerspossibilitiestocurbillegalservices Negative"effects" Clientsareunawareoftheprescribed documentstheyneedtobring Additionaladministrativecosts OfferspossibilitiestoutilisetheDutch licenseinothereuropeancountries (EuropeanPassport) [reference:informationobtainedfrominterviewswithmtos] ( Additional(services( Y Y Implementationandexecutioncosttime andeffort Executingcontrolslowsdownthe process Becausealargeportionofthereceiversabroaddoesnothaveabankaccount,theMTOs handleanimportantshareoftheremittancesmarket.thisoffersopportunitiestoexpand the services with additional services such as insurance and savings possibilities. Western 23 Moreinformationonthenewlyestablishedpartnershipcanberetrievedhere 24 InformationiscompiledfrominterviewswithseveralMTOsofferingtheirservicesontheDutchmarket betweenoctoberandnovember2013.
19 REMITTANCES"MARKET"IN"THE"NETHERLANDS" 19 Union for example now offers Mobile Payment online 25, provided this is offered in the receiving country, which could imply a plethora of additional service possibilities such as mobilebillpayments. Current additional services offered by the MTOs, which are offered besidesremittances,are: " Additional"services"offered"by"MTOs" MTO" Western"Union" SuriVChange" Moneytrans" KaahVExpress" Services" DeliveryinmYwallets(receivingmoneyinamobile(oronline) wallet) Orderingofforeigncurrencies,paymentofacceptgiro,Home deliveryofmoneyfreeofcharge,sendmoneytomobile (serviceofferedtoghana) VIPYServiceforinvestors(documentsdonothavetobe shownduringeachtransaction),andpilotcashytoyhealth (clientcansendmoneydirectlytoahospital) PaymentofacceptYgiros From the aboveymentioned services, it follows that there are currently no insurance or savingspossibilitiesbeingofferedbythelargemtos.though,duetothepartnershipwith SurichangeBank(SCB)inSurinam,transferredfundscanbeutilizedforloanstotheSurinam communityconcerninginvestmentcredits,studentloans,personalloans,carfinances,and deposit credits. This approach shows that remittances can prove valuable in confirming credityworthinessofcustomersandhaveleadtocrosssellingofotherfinancialservices. II.3.2Banks ThethreemajorDutchbanks ABNAMRO,ING,andtheRabobankYplayalimitedrolein the remittances market. Their precise market share is difficult to assess, because the absolute size of the remittances market is not really known, and because the banks themselves do not always distinguish between remittances and other international payments by private customers in their internal statistics. Migrants are not targeted as a 25 TheserviceofferedbyWesternUnionprovidesconsumerswiththeoptiontosendandreceivefundsinthree ways:(i)cashtomobile,(ii)mobiletocash,and(iii)mobiletomobile(ifthemobileoperatorcooperateswith WesternUnion)..Formoreinformationontheircorporatestrategy,referto
20 20" REMITTANCES"MARKET"IN"THE"NETHERLANDS distinct group of customers. 26 They are welcome as everybody else to open a payment accountandmakeuseoftheservicesofthebanks,buttherearehardlyanyspecificservices thatmeetthespecialneedsofmigrants.giventhelimitednumberofpotentialcustomers from certain African countries such as Nigeria and Somalia within the Netherlands, this marketsegmentisperceivedasnotverycommerciallyattractiveforbanks. Banks only play a role in remittances sent from bank account to bank account. Since relatively few people in the countries of origin of migrants possess a bank account, their market share is inherently limited. Orozco underlines the importance of having a bank account and argues that banks show a lack of understanding of the financial behavior amongremittancesendersandrecipients,unwillingnesstoworkwithlowyincomeorrural customers,limitedcoverageinruralareas,highcostsofformalbankingservices,orfinancial illiteracyamongremittancereceiversandsenders. (Orozco2013,103)Thisstatementdoes notnecessarilyapplytobanksinthenetherlands,butalsofordutchbanks,thereiscertainly roomforimprovement. Internationalpayments,furthermore,arenotaverylucrativebusiness.Bankdepartments responsibleforinternationalpaymentsareactuallyfullyabsorbedbytheintricaciesofthe introduction of SEPA, the Single Euro Payments Area (on the 1 st of February 2014); the remittances market and the limited business opportunities in this field do not get much attention. In comparison to the speedy delivery of funds by money transfer operators, transfers through banks outside the EU can take several days, depending on factors such as the transfer mechanism used and the procedures of the receiving bank (Mohogu 2006: 23). However,insomecasestransferringremittancesthroughbanksischeaperthanusingthe services of MTOs, which could counterbalance the delay in delivery of the funds for remittersandreceivers.aswillbeshowninpartiii,thespeedofserviceismentionedasone oftheinfluentialfactorsdeterminingthechoiceofchannelbymigrantremitters. Globally, banks seem however to become more wary to offer remittance services. Only recently,barclayshaswithdrawnfromofferingremittanceservicesinsomalia.thecountry is now left with no banks that offer remittance services. Barclays presumably fears its 26 WiththeexceptionthattheRabobankappliesalowertransactionprovisiontotransferstothosecountries wherelargenumbersofimmigrantscomefrom(seetablebelow),andingbankappliesespeciallylow OUR coststoalmostthesamerangeofcountries.inthatway,theydoofferspecialconditionstoremittances.
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