Mon | Sep 25, 2017

Western Union reviewing proposed remittance fees

Published:Friday | April 28, 2017 | 4:00 AMSteven Jackson
Pedestrian's walk by a Western Union sign on King Street in downtown Kingston on Tuesday, April 25, 2017.

United States-based financial services company Western Union has indicated that it is reviewing a proposed two per cent tax on remittances sent from that country to Jamaica and 41 other countries to be used to pay for a wall at the US border with Mexico.

The tax is outlined in a bill currently before Congress to amend the Electronic Fund Transfer Act.

"The company is currently reviewing the proposed bill," said the globally expansive Western Union in a response facilitated by Don Wehby, group chief executive officer of GraceKennedy Limited, which act as the money transfer company's agent in Jamaica.

Western Union added that "remittance tax legislation has broad implications. The need to move money reliably and through formalised channels is important and has never been more relevant to consumers and businesses".

Some experts have indicated that the proposed tax could increase informality. Yet others see the tax as making traditional remittance methods less competitive against rival online methods, including Paypal, Payoneer, Bitcoin and other new money platforms.

On March 30, the United States Congress introduced the bill to impose a fee for remittance transfers to Jamaica and other foreign countries to fund the building of the border wall proposed by President Donald Trump.

Lasco Financial Services, agent for MoneyGram in Jamaica, earlier this week said it views the development of the bill as unfair and one which will increase the cost of providing the service, in the event that it becomes law.

The last action on the bill saw it being referred to the US House of Representatives Subcommittee on Immigration and Border Security, as well as the Subcommittee on Crime, Terrorism, Homeland Security, and Investigations, on April 21.

It stipulates that if the designated recipient of a remittance transfer is located in a foreign country, a remittance transfer provider shall collect from the sender a fee equal to two per cent of the United States dollar amount to be transferred, excluding any fees or other charges imposed by the transfer provider.

steven.jackson@gleanerjm.com