by: Poppy Isaacs
As the foundation of our business here at DMA Global is remittances and their effects, it wasn’t until I became a ‘sender’ during a project last year, that I fully understood the process. The concept of sending money is a pretty simple one, but in practice, it is not always so easy. Through my experiences, I have a lot more understanding of some of the big frustrations that migrants in particular have with sending money home.
The flow of how to send money online is as follows:
DMA Global was doing a project which involved interviewing Syrian refugees living in Germany who send money to their relatives living in Jordan. We were trying to understand their remittance habits and their level of financial understanding. We provided a €30 incentive for completing the interview. For a number of reasons, it was thought the simplest way for the participants to receive their incentive was in cash (although a few opted for a bank transfer).
ID Verification & Online Remittance Services:
We decided to use the online services of a large established remittance company first. We had one major issue with using them and that was:
A person can send up to £1,000 before they are required to provide ID documents, which is a good threshold. However, the problem came when providing the documents – I submitted my passport copy, as prompted, and was told it would take between 2-5 working days to be verified. During this time, a person cannot send any money with that provider. It did not in fact take 2-5 working days, and after a week, we were getting very agitated interview participants who were not receiving their due funds.
When we spoke to customer service, we were reassured that it would be 2 working days. Unfortunately, it was not, and in fact it was not until 4 weeks later, a total of 5 weeks waiting, that my ID was finally verified, with no explanation as to why it took so long.
Whilst this was a great inconvenience for us, ultimately a person’s livelihood was not depending on us at the other end, as it is for many migrants. It made us all acutely aware of the fact that although economic migrants often move to more economically developed countries to earn money they can send home to their families, they may not be able to do so for a significant time because their ID has not been validated and they don’t know why.
Communication with online remittance services
Whilst we were waiting for our ID verification from that global company, we decided to use another large traditional global company’s online service to send the incentives instead. This initially seemed to go through fine, apart from needing to provide my ID from the first transaction. But alas, we encountered another problem:
The agent on the receive side told our receiver that the transaction was blocked, and when I rang customer service to find out why it was blocked, they told me it was not blocked. So, I passed on this information to the receiver who went back again to the agent, who once again said the transaction was blocked. I once again rang the customer service who told me in fact it was blocked, but from the receive side because the recipient needed ‘questioning’, which I struggled to understand, and must have been quite humiliating for the recipient. In the end, they gave me a full refund.
The main issue with this method was the lack of communication. We are still unsure why the transaction was blocked and by whom.
After these online services proved unusable, it was the turn of trusty ol’ cash.
Cash Remittances & Uncomfortable Customer Service
This involved taking cash to an agent and filling in a form. Whilst this is the oldest form of modern money transfer, it is also the most time consuming. We were aiming to interview 100 people in Germany over a 1-month period. This would involve a lot of trips to the agents, and it takes about 3-4 minutes per transaction. The agent also did not accept card payments, so we had to have the right amount of cash.
After about 10 transactions, the agents were becoming sceptical, which although I was doing nothing wrong, created an uncomfortable atmosphere, making me feel quite intimidated.
Once again, we were triggered to think of migrants who could face this sort of treatment, being in a foreign country, not speaking the language fluently and having ‘different’ names.
However, despite all the issues that were faced at the beginning of this project, once the ID was verified for the initial online service, the rest became very simple, quick and efficient.
Financial Inclusion & Digital RSPs: Bank Transfers & Mobile Money
We also tried a bank transfer service through one of the newer digital only operators. This was also exceptionally painless and simple. Whilst the ID had to be verified, this one only took 1-2 working days, and they were very good at keeping us updated about what they were checking for and how the process worked. From our perspective, the issue does not lie in the actual verifying of documents, but in the communication. If all the receivers had bank accounts, then we would have used this method. But often, the recipients of migrants’ remittances might not have bank accounts.
Incidentally, since we have completed that project, another one of our projects has involved sending remittances, this time involving sending to a mobile money account. We chose to use another digital only operator, as it is one of the few Remittance Service Providers (RSP) that send to mobile wallets from the UK. The system was simple enough, and we needed to provide the name and number of the recipient. However, we received an email an hour after we tried to send it saying that our transaction was declined, and our account was permanently deleted, and apparently, they do not need to provide a reason for it. So that was that, there was nothing we could do. In the end, we transferred the recipient cash via a well-known operator!
Overall, we have had a lot of issues with money transfer operators, but those experiences have been quite valuable. I was relatively new to the field when providing these payments, and given we undertake many price comparison activities it provided me with a good level of understanding of how it works from a sender’s perspective.
I’d be happy to name and shame the operators if you would like to get in contact.