This makes me a little sad – Western Union is no longer providing telegram delivery services. In the era of mobile phones and email, telegrams are more than a little old-fashioned and I suspect very few people will miss their disappearance.
Despite the fact that I’ve been using email since 1989, I’m one of Western Union’s few remaining telegram customers. For the last couple of years, Western Union has offered a web-based telegram service – fill in a form online, enter a credit card number and your telegram’s delivered within a day. I use telegrams to get concerns to senators and congresspeople – a congressman might get hundreds of paper letters and thousands of emails a day, but not many telegrams, which get hand delivered to congressional offices. Because they’re not cheap – about $20 – it’s also a way of letting politicians know you care sufficiently about an issue that you’re willing to spend money. (American Telegram offers a service specifically to deliver telegrams to politicians, but it’s signifcantly more expensive. Perhaps I’ll just send flowers in the future.)
For decades, Western Union has made money sending a different kind of information through the wires – financial transfers, which now represent the vast majority of their income. Unfortunately, they tend to charge extortionate rates to workers who are sending small amounts of money back to their families in developing nations. I have high hopes that some technological innovation will make expensive remittance services look as primitive in the near future as telegrams do in an Internet era.
Less expensive remittance services are known as banks.
For the UK there’s a page by the money transfer industry comparing the individual services at http://www.sendmoneyhome.org I learnt from BBC Radio 4 Moneybox:
http://news.bbc.co.uk/media/audio/41036000/rm/_41036796_money.ram. It appears the cheapest provider for UK-Ghana transfers is “Express Funds” charging 4.24% for a 10 minutes/instant transfer.
I think this will be much improved by services such as http://www.moneybookers.com which is similar to PayPal but much cheaper. I use it exclusively to move money between my UK and German bank accounts. Cost is between Euro 1.80 – 3.50 per withdrawal and 0.8% on the official currency exchange rate (http://www.moneybookers.com/app/faq.pl?gid=2&qid=718). It takes a bit of time to transfer money from the UK account to moneybookers and then again from moneybookers to the German account (in sum ~5 days), but I feel at this price it’s well worth the wait: Citibank in comparison charged at least 1.75% for the exchange and £25 per transaction to a non-Citibank account in Germany.
If you’re not moving money between your own accounts you will have to send it (paypal-like by sending to their email address) to the recipient’s moneybookers account which incurs an additional charge of Euro 0.50 or 1%, whichever is less.
I think it likely that moneybookers will over time increase the number of countries you can send money to http://www.moneybookers.com/app/help.pl?s=fees and the currencies http://www.moneybookers.com/app/faq.pl?gid=1&qid=104 available, and why not even to Nigeria/Naira and Ghana/Cedis?
Of course, the recipient of the money needs to have internet access and a bank account which makes this only an attractive option for a certain subset of recipients. I guess if you are young, receive remittances and live in/near a big town there’s a chance you have internet access already, but apparently few people have a bank account in Ghana.
Now this is a long shot, but maybe if payment services like moneybookers could get large companies in the target countries to accept payments from them (again a la PayPal) that would make it a more viable option in, say, Ghana. I could well imagine a Ghanaian working over here and sending money home this way with his sister topping up her mobile phone and paying electricity bills (many more people over there seem to have a mobile than a bank account) over the internet without ever needing a proper bank account.
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Tom – an enormous percentage of people in the developing world are “unbanked” – generally, they don’t have the money, the identity papers or other qualifications neccesary to create a bank account. You’re right – banks transfer money much less expensively than remittance services. But I’ve moved money from developing nations around the world, and it’s simply not possible sometimes to use banking services.
Thomas, thanks so much for those links – very helpful.
Can I tell you that I have a friend in Accra for over 7 months now….and trying to communicate with people over there to find out his condition…last I knew he was in a coma. The phone system is horrendous, not to mention fees to send money. I will have to check out Moneybrokers but for now, its good old Western Union.
Thomas mentioned my website http://www.sendmoneyhome.org and i just wanted to let you all know that the site is an independent and impartial international money transfer comparison site. It now not only covers the UK but many more countries. It’s aim is first to let users of remittance services know that there is a lot more choice when sending money and also to encourage trust and promote the use of the formal financial sector not just for remittances but other banking services thus promoting financial inclusion.
A couple of people have mentioned Western Union and also Moneybookers, but if you visit the site you will be able to compare many more services and find the cheapest and most suitable for your needs.
There is still telegram service.