Money Transfers Newsletter, July 2007

Dublin-based messaging services provider Anam announced on June 17, 2007 that the company plans to roll out an offering to enable money transfer services via SMS. The service allows the customer to select a name from his or her mobile phone address book and type a message prefaced with the word “cash” and the amount to be sent. The customer sends the SMS, and the money is transferred from sender's bank account to the recipient's. Clearly, the target group is the international immigrant population but the convenience of use widens the scope of the customer base. However, the plan's success is largely contingent on buy-in by large mobile phone networks and banks.

In response to more stringent international standards worldwide since 9/11, the Canadian Department of Finance has rolled out stricter measures to fight money laundering and terror funding. The new rules address areas of international concern such as reporting suspicious activity, collecting detailed data from customers, focusing on politically exposed persons, and registration with Canadian financial watchdog FINTRAC. The DoF has given banks time up till July 2008 to implement most of the directives, with the expectation that the banks will bear the financial fallout of the changes. In the year 2005-06, FINTRAC reported C$4.75b worth of suspected money-laundering cases and C$256m of suspected terror funding cases.

A project by New Zealand's Waikato University, named Tongan Transfer, undertaken by its students, claims that Pacific Islander migrants to the country lose millions of dollars when they transfer money back to their home country. The results of the research by Waikato University economist John Gibson, released on June 28, 2007, indicate that the international remittances to these countries were around $600 million annually. He said the study suggested that $60 million could be saved if cheaper transfer methods would be available, due to the extremely high cost (20% in some cases) of transfer.