Expats to benefit from instant dollar transfers
Overseas Filipino workers (OFW) can now make instant money transfers in US dollars to the Philippines after global money transfer company, MoneyGram, introduced the facility to help customers avoid fluctuating exchange rate risks.
MoneyGram is also planning to introduce the option to transfer money in dollars for other Asian customers if central banks in these countries change their rules to enable receiving remittances in greenback.
M Lhuillier Financial Services, a financial exchange institution in the Philippines, began the first MoneyGram international money transfer service in April that allows Filipino customers to receive MoneyGram transactions in US dollars any time of day.
The introduction of dollar payouts is expected to be especially appealing to OFWs, as they can maximise the funds that reach their families by minimising the currency exchange risks.
Normally, customers pay more for instant international money transfers than the normal exchange rates. Receiving money in dollars would avoid this, especially since the recipients can convert the dollars to pesos as per their convenience and requirement.
Due to the crisis, remittances from the UAE to the Philippines are expected to come down by more than six per cent to $1.4 billion (Dh4.18bn) from an estimated $1.5bn in 2008, and MoneyGram is using the dollar transfer scheme to lure away customers from Western Union, which does not have this option. Other Asian expatriates in the UAE cannot enjoy the same benefit due to central bank restrictions in their home countries.
"We are offering the option of receiving instant money transfers in dollars only to the Philippines. We will extend the facility to Indian and Pakistani customers if their central banks change their rules related to receiving foreign currencies. In the case of India, there is a Reserve Bank of India rule that prohibits sending money in dollars," said a MoneyGram official.
Industry experts say most instant money transfer schemes make huge profits by giving an unfavourable exchange rate to their customers. Even the fees for instant money transfers vary – Dh15 to India or Pakistan and double, at Dh30, for the Philippines.
N Selvaraj, manager at City Exchange, a money exchange company in Ajman, said the facility to receive instant money transfers to India in dollars was not allowed, but customers could send dollar cheques through bank accounts.
"Providing such a facility will definitely help customers avoid exchange rate risks during uncertain periods in foreign exchange markets. The exchange risk depends on the conversion ratio in the respective countries."
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