APPENDIX A
CARIBBEAN/WEST
AFRICAN—REGULATION
AND INCREASING
COMPETITION
Those sending remittances to countries in this
region may have been resident in the UK for 50 years (Jamaicans)
and 20 years (Ghanaians/Nigerians). Traditionally, this sector
has relied on small ethnic retailers who may offer money transfer
as an ancillary service to other business activity (eg African
food shops). These retailers may find themselves under pressure
from new legislation to tackle money laundering which has tightened
up the rules for money transfer. In 2001, the government passed
new laws which required all UK money remitters to be registered
with Customs and Excise. Many remitters in this market have still
not registered and new, and even stricter, legislation has been
coming into force from March 1st this year.
By offering smaller ethnic remitters the chance
to become registered Chequepoint money transfer agents, Chequepoint
has provided these small businesses with a level of security around
anti-money laundering compliance issues which they need.
Furthermore, by a policy of cheaper prices and
high reliability, Chequepoint has introduced levels of competition
in to these more established money transfer markets, which has
been appreciated by customers. One such example is the corridor
to Ghana. By the end of 2003, Chequepoint had captured a 25% market
share of remittances from the UK to Ghana. Chequepoint is the
major remitter to Ghana.
EASTERN EUROPE—NEW
MIGRANTS
Potentially, the most explosive corridors in
terms of potential growth are new migrants from Eastern Europe
and the countries of the former Soviet Union (Poland, Hungary
and Lithuania are good examples. These countries (and seven others)
join the EU from June 2004 when permits will no longer be necessary
to work in the UK. Apart from issues of reliability and commission
charges, this group appreciate the opportunity to make remittances
in cash or into bank accounts which Chequepoint offers. Those
from Eastern European countries who remit money through Chequepoint
are more likely to be employed in jobs areas where a high standard
of English in not a pre-requisite (eg construction).
The level of transfers to Poland is one measure
of the dynamics within the former Eastern bloc in exporting migrant
workers to the UK. Total transactions processed were 10,000 compared
to 500 processed in 2002. This gives a year on year increase of
almost 2000%.
Chequepoint offers a service to key Baltic states
such as Latvia, Estonia and Lithuania, all of whom are joining
the EU from May. The number of migrants from Russia and Ukraine,
and hence the volume of remittances to these countries, is also
significantly increasing. Overall, there was a very significant
rise in number of transactions processed from the countries of
the former Soviet Union in 2003 as compared with 2002.
SOUTHERN HEMISPHERE—SHORT
STAY WORKERS
BUT LARGER
ONE OFF
TRANSACTIONS
The dynamic in the market to the southern hemisphere
(South Africa/Australia) is different. Those who remit are likely
to be relatively well educated younger people working in the UK
on short stay visas. They may be employed in a diverse range of
jobs: bar work, IT, teaching and local government, etc. One characteristic
of this group is a tendency to send a single substantial bank
transfer at the point of departure to their country of origin.
This may be used for a deposit on a house purchase on their return.
Traditionally, South Africans and Australians
have tended to use the high street banks to send their transfers,
but there is growing disquiet about the costs associated with
this method.
For example, through one of the major UK high
street clearers, a bank transfer remittance of £100 may bring
a fee of as much as £20 and there may be other charges made
to the recipient by the bank in the country of destination. Chequepoint,
by contrast, makes an up front charge of only £5. Overall,
Chequepoint customers can pay 30% less in total commission charges
than they would using a bank.
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