It may seem astonishing, especially in a world increasingly viewed through a prism of facts, figures and stats, that the UK does not officially measure remittance flows or international money transfers into or out of the country.
But it is true: according to the University of Oxford’s Migration Observatory, which provides “impartial, independent, authoritative, evidence-based analysis of data on migration and migrants in the UK”, estimates concerning the amount of money that is transferred annually between Britain and the rest of the world vary from approximately £1.5bn, to over £16.5bn – a substantial difference, by any measure!
The Migration Observatory notes that since foreign exchange controls were removed in 1979, there has been no official measurement system for recording volumes of international money transfer transactions; the same goes for the amounts sent, destination of the money, and the reasons for sending.
Small wonder, then, that banks and the major money transfer agencies such as Western Union, MoneyGram and Ria Money Transfer have been getting away with overcharging for money transfer services for so many years.
It seems the public, not only in the UK but all over the world, are somehow hard-wired to believe that sending money overseas is an expensive business, due to the administration, complication and technology involved. In fact, the process is becoming simpler, and more transparent, than ever before!
Super fast transfer services that charge next to nothing in fees and use the official exchange rates that you can find using Yahoo finance or any other online exchange rate guide; TransferWise, for example, Azimo, Revolut, World Remit or, if you are sending larger amounts, a dedicated money transfer broker like Effective FX, Tor FX, OFX and Fair FX; are making sending money overseas easier, cheaper, and fairer for the consumer.
With so many new players in the marketplace, picking the right option may seem daunting, but services like The Money Cloud, the original overseas money transfer comparison site, are making it easy.
Simply input the amount you want to send and where you want to send it, and The Money Cloud does the rest; obtaining live quotes from brokers and agencies handpicked for the quality of their service as well as their prices; listing fees, transaction times, and even the savings you will make compared to using a bank or a high street money transfer store – which could be up to 85% on fees alone.
Whilst the international money transfer industry may be more fragmented as a result of new technology technology; whether it be blockchain money transfer protocols or PSD2 enabled API access to live pricing feeds; thanks to sites like The Money Cloud, that doesn’t mean the industry is becoming more complex. In fact, it’s the opposite. In the face of so much competition, the Money transfer industry is finally putting the consumer first.
To return to the problem of tracking how much money is sent overseas, we should try to understand what the current measurements are. There are 4 main sources of data; the most conservative comes from the World Bank, whose official estimate suggests that £1.5bn is sent abroad from the UK each year; but it is widely believed that the real figure is much higher.
The next lowest estimate is derived from Eurostat, whose figure of £5.3 billion is more than three times higher, followed by the World Bank’s Migration Remittances figure for the UK which stands at £7 billion.
Finally, there is a bilateral remittances estimate, also from World Bank; £16.5 billion!
Which is the correct, or at least the most accurate figure? The truth is, it’s hard to know. And it’s not just outflows that are hard to measure either; inflows of remittances into the UK have been estimated at anything between £1-3 billion, based on World Bank data from 2014. When compared to the bilateral figure, this seems to be erroneously low.
That the figures are so unclear just goes to show how much work there is still to be done when it comes to demystifying international money transfers on behalf of consumers. Imagine if the next time you decided to transfer money your broker told you the cost could be anywhere from £100 to £1500. It’s doubtful you would be impressed with this level of accuracy.
The more we can understand about the international money transfer industry, the more progress we will make educating money transfer agencies about what the right fees and exchange rates to use really are.
At The Money Cloud, we watch the industry closely on a daily basis for your benefit, so stay tuned for more news soon, including the world’s biggest remittance corridors, global and local trends, and how to win when it comes to sending money abroad.