Western Confusion

Each year, migrant workers send billions of dollars back home to
support their families and build up their communities. Getting that
money there is big business — the international remittance money
transfer trade is estimated at $250 billion — and storefront
chains tap the flow by charging exorbitant fees to guarantee
immigrants that their earnings will make it home safely. That’s why
consular IDs were introduced four years ago, starting in San
Francisco. The identification cards are recognized by mainstream
banking services so that migrant workers, even those in the United
States illegally, can set up bank accounts and use ATM cards to
transfer money at low rates (about $2.50). It would seem that
such a system would put the high-charging money wiring outfits out
of business. But,
reports SF Weekly columnist Matt
Smith, the industry’s behemoth, Western Union, has managed
to stay in the game with an aggressive marketing campaign that
includes co-opting foreign consulate’s efforts to educate
migrants about their options.

As Smith reports, Western Union is sponsoring the San
Francisco-based Guatemalan consulate’s outreach in towns and cities
in the West. The ‘mobile consulate’ program sets up temporary
outposts to proffer typical bureaucratic consular services and to
inform immigrants about the low-cost options for sending money
home. But, Smith reports, since Western Union foots the bill for
travel and expenses, the company gets its own booth to hawk its
services. ‘With the complicity of foreign consulates,’ Smith
reports, ‘Western Union has managed to position itself as something
along the lines of a quasi-governmental service.’

The tack is in line with the company’s broader ‘helping hands’
initiative, which, according to the marketing strategy outline
produced by PR firm Bromley/MS&L, is intended to ‘[create]
partnerships with credible third-party sources’ so immigrants
become ‘willing to pay premium prices.’ Charging $13 to wire $120
from California to Guatemala (service fees are even higher for
longer distances), Western Union is one of the most expensive money
transferring services around. Still, immigrants are using it.

A handful of activist groups are trying to change that. The
Oakland-based nonprofit
Transnational Institute for Grassroots Research
& Action hopes to create a global consumers union to serve
immigrants’ remittance needs in their host and home countries. ‘The
closer the financial service company is to community projects, the
better the likelihood that it will benefit families,’ says
executive director Francis Calpotura. Another idea, proffered by
Lauren Leimbach, executive director of
Community Financial Resources, another Oakland
nonprofit, is to devise a system whereby immigrants use prepaid
debit cards to transfer money back to their families, who would
have similar cards.

Both are good ideas, Smith says, but he offers another, perhaps
simpler, solution: ‘Migrants merely need to hear a loud and clear
message that when it comes to financial services, you’d better shop
around.’ A first step towards that, he says, is getting Western
Union out of the consular business. — Rachel Anderson

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Western Confusion

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