Monthly Archives: November 2016


Money transfer taboo you should break

Money transfer is something people living abroad don’t talk about. Actually they sometimes talk about the money transfer operator but not more. Indeed we don’t want to share how much money we transfer.


What is the money transfer taboo?

Well. Ask any expatriate, migrant or international student about money transfers. He or she will answer that he is currently using his bank to perform money transfers. When you ask whether it’s easy. He will say yes of course. Because he is so smart you know. But in fact it’s a mess to deal with money transfers with your bank. Everybody knows. Nobody says.

Second case. Ask someone the same thing. He might answer that he is using his bank. Is it cheap? Yes of course, because his banker loves him so much. Bankers are nice obviously. They might think we will become rich one day. No no no! Bankers take money from their clients. There is no money transfer which is free because it costs a lot to the bank and the bank is not a non governmental organization! There is no free service. There is no free bank.

Third case. Ask someone about how he is transferring money. He will either answer he is using a special partnership with his HSBC account so that money transfer is free for him #false; or he will answer he is using Worldremit and that WorldRemit is a free service which charges only if you really are a bad guy. But the service only charges others. Not him. Obviously.

Then you might ask a 15524th guy. Me. I will answer that everyone is struggling but it’s a taboo to say you struggle because you might appear to be stupid. I will answer that everyone is paying low fees at the beginning, that fees are hidden in the exchange rate and when you send money you don’t see the fees. Of course you’re not going to make the calculation because it’s a job. However their invoice doesn’t reflect the real amount they charge us. Last but not least I will answer that everybody speaking about Transferwise thinks it’s a very cheap way to send money internationally even though they recently doubled the fix cost for money transfers from the UK. You are not proud. Nobody is proud when he pays more. And  nobody is telling because he is not proud… Taboo!

Why is it important to break all taboos about money transfers?

Just imagine a world where everybody would share how much they transferred and how much it costed to them? Is it good? Yes and No. Some people will realize that some others are rich. They will be jealous or become friendly. It will change the relationships they have.

Anyway you might choose to keep the relationships as they are. You might therefore keep taboos. At the end the ones who pay are you and your friends. And the ones who get your money are the money transfer services, the banks and the currency exchange specialists. Is this smart? What do you prefer?

I hope you realize now how important it is to stop keep secrets between friends. We need to share in order to make the economy improve. And if we don’t the industry has an advantage on us. I can’t bear the fact that because we decided to hide things to our friends there are companies which profit from us and screw us financially. Let’s change our habits. Let’s be more responsible and make them adapt to smart communities sharing smart ideas.


What happens if Filipinos suddenly stop to make international money transfers?

Filipinos can be considered the world champions of international money transfer. The Philippines currently rank number 3 in the countries that receive the most remittance each year, according to the World Bank.

Why Filipinos make international money transfers?

According to the World Bank, 5.4 million of Filipinos are living outside of their home countries. There is even an acronym dedicated to them: OFW, Overseas Filipinos Workers. In 2015, they sent $28 billion in international money transfer. Over the last 3 years, remittances have increased by 20%, representing today 13,5% of the country’s GDP. You can easily imagine the terrible consequences for the local economy if the remittances would suddenly.


Most Filipinos’ international money transfer mainly come from the USA (representing one-third of the total remittances with 3.5 million filipinos living in the country) then Saudi Arabia, UAE, Canada (750 million) and Malaysia. In total, 34% of the adult population is receiving remittances from relatives living abroad.

How do they make international money transfer?

12% of Filipinos use a financial institutions send money home. However using such institutions is by far the most expensive way to make an international money transfer. Indeed for such transfers you’ll pay on average 10% of the amount in fees.

58% of OFW use a money transfer operators for their international money transfer.

What is exactly a money transfer operator? There are two types of them:

  • The “traditional” ones such as Western Union or Moneygram. Even though they are probably the most famous one, they are very expensive. Expect to pay also 10% fees with such operators.
  • The new actors operating 100% online such as Transferwise or WorldRemit. Currently, they are the cheapest option you could go for as they cost on average 2% of the amount transferred.

One key stake about remittances in the Philippines is to be able to reduce their costs. They currently cost an average of 8%, which means that each year $2.3 billion are literally disappearing (actually going to the banks). I let you imagine what could be done if this amount could be saved each year on all international money transfer.