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ACCRA. — A RIVAL global money transfer firm has warned against a possible merger between Western Union and Moneygram. Ismail Ahmed, founder and chief executive officer of WorldRemit, said if the Britain’s leading money transfer companies merger goes on successfully, Ghanaians and Africans abroad would pay more for sending money home.
It was reported that Western Union was in early-stage talks to buy Moneygram, as both contend with competition from upstart money-transfer companies.
Western Union and MoneyGram — the two dominant players in the remittance industry — are facing price competition as companies including WorldRemit, TransferWise and Wal-Mart Stores Inc give their customers new options for moving cash.
Ahmed told CAJ News in an email that Ghana received more than US$126 million in remittances every year, which is an important contribution to its gross domestic product (GDP).
“A potential merger between MoneyGram and Western Union would reduce competition in the money transfer sector in many countries, including Ghana,” said Ahmed.
“This could mean that fees go up and the quality of service could go down. As we said in the statement, a merger of these companies would “create a monstrous monopoly that would impact the livelihoods of millions around the world.”
Ahmed noted that around 95 percent of remittances globally were sent offline, using companies like Western Union and MoneyGram. Online remittances reduce fees, as well as improving speed and convenience for users.
He said online services such as WorldRemit were drawing away their customers with greater convenience and honest pricing, but more than 95 percent of remittances were still sent offline, primarily through these two companies.
“We call on regulators to block this deal unconditionally — in the interests of migrants and expatriates around the world who rely on international money transfer services to support friends and family in their homelands,” said Ahmed. — CAJ News.
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