Thursday , May 19 2022

Monde: French user associations files match Western Union and MoneyGram



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UFC-Que Choisir has announced that he has filed a legal case against Western Union and MoneyGram for "fraudulent marketing practices", which refers to weak competition in international and high-level international currency transfers, which ranges from countries.

The UFC-Que Choisir French language association announced on November 27 a study dedicated to international currency transfers. "It's common for sending between relatives (residents of foreign origin, parents sending money for students of overseas students, etc.) for one-time operations or resumption," she says her analysis.

The organization claims that it has filed a legal case against Western Union and MoneyGram for "fraudulent marketing practices" and calls on the government to "create the conditions for healthy competition." "Western Union nor MoneyGram do not tell their customers clearly how to raise foreign exchange fees," said UFC-Que Choisir. Overall, the company's exchange fees transfer 2.5% higher than the companies online, and even 7 times more than the exchange fees charged by the banks.

In terms of these costs, the society makes the "anesthesia" perception of the competition, certifying the differences in the tariffs that are practiced: for Tunisia, these vary by amplitude of 34% , costing the maximum of 11,40 euros for a transfer of € 170 in Ria, against 8.50 euros in MoneyGram.

10.3 billion were transferred outside the eurozone

The society explains it. Of € 19 billion that is being sent each year from the French territory to abroad, 10.2 billion euros are transferred to a country outside the eurozone. "Almost half of this volume (52%) is sent to the Middle East and North Africa (Morocco, Algeria, Tunisia and Turkey). The Asia-Pacific zone is sent 1.9 billion euros (19%) (19%) Vietnam, China and India), while 1.5 billion are being sent to Sub-Saharan Africa (Senegal and Chamer), or 15%. "

In France, foreign currency transfers (excluding the eurozone) of individuals cost 6.7% of the average sent. The user pays for a fee for a service fee, "the price of the admission, processing and payment services abroad", and exchange fees ", which results from the difference between the conversion rate used from the provider and the market rate, "said the study.

Traditional transfer companies are more expensive

Traditional transfer companies (Western Union, MoneyGram, Ria, etc.) charge a fee of 7.3% of the amount sent. "The cost of this service is up to 12.4% as part of the La Banque Post partnership with Western Union".

New online players (TransferWise, WorldRemit) are cheaper at 2.6% on average, but services are more limited. These transfers can also be made through banks, which increase 6.9% of the amount sent on average, or La Poste services, which give 5% of the amounts transferred hun.

Behind this average cost, it does not hide large differences, ranging from one to two depending on the destination. So, "a transfer of 179 euros to Morocco costs € 8.30, or 4.9% of the amount sent"; "The same amount transferred to Algeria is invoiced 16.20 euros, or 9.5% of the amount," the report states. Overall, the transfer prices to Algeria are 64% more expensive than the average transfer fee of France.

"For the eight main transfer destinations, French prices are an average of 14% more expensive than those of our European neighbors," says the society. "The most incredible tariffs can be found in Algeria (+ 11%), Morocco (+ 17%), India (+ 22%) and Vietnam (+ 25%)."

No relationship between transmitted volumes and the price of transfers

For the consumer organization, "serious market failures account for the excess prices". Although many studies from the World Bank document an adverse relationship between payment rates and trading volumes between the two countries, this dynamic does not work in France.

Therefore, "the cost of cash transfer to money to Algeria (the second resort area) reaches 9.4% of the amount sent". "On the other hand, only 5.5% of the amount sent is the cost of transfers to Gôte d'Ivoire (the fifteenth country in terms of volumes sent)."

Society's conclusion: "Competition does not benefit consumers in the money transfer market". In particular, "the difficulty for consumers to assess the total cost of cash transfers".

Exchange fees are not very transparent

Pressure UFC-Que, especially the exchange fees. For the six main destinations, these represent, on an average weighted basis, 26% of the total billing and transfer payments made by users. "These fees up to 42% filing a transfer to Dunisia but there is no charge for destinations with CFA Franc," said the study.

Players in the foreign currency transfer market use the same practices when it comes to informing consumers of the exchange fees charged on them. As a result, almost 15% of companies do not provide billing information, according to World Bank.

With Jeune Afrique

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