International Remittances:
Information on Products, Costs, and Consumer Disclosures
GAO-06-204: Published: Nov 17, 2005. Publicly Released: Nov 17, 2005.
Additional Materials:
- Highlights Page:
- Full Report:
- Accessible Text:
Contact:
(202) 512-3000
contact@gao.gov
Office of Public Affairs
(202) 512-4800
youngc1@gao.gov
Remittances are personal funds immigrants send to their home countries. The United States is the largest remittance-sending country in the world, with more than $36 billion remitted in 2003, according to the International Monetary Fund. The majority of these remittances are sent to Latin America and the Caribbean and they are a very important source of financial flows to many countries. In 2004, the United States, with other countries, pledged to reduce fees for remittances. Remittance senders in the United States can send funds through entities in the formal financial sector such as money transfer operators, banks, and credit unions or other informal means such as couriers. This report provides information on (1) the methods of transmission available to remittance senders in the formal financial sector and the advantages and disadvantages of each, (2) the costs to send remittances through the formal financial sector, and (3) disclosures remittance providers typically provide to senders.
Remittance senders in the United States have a range of methods available including money transfer operators (MTOs), banks, credit unions, and the United States Postal Service. However, most transactions occur through MTOs. These products range from cash-to-cash wire transfers to account-based transfers, stored value cards, and Internet-based transactions. There are a number of reasons remittance senders continue to choose MTOs over other providers, including their extensive networks and customers' familiarity with their products. Banks and credit unions offer some products at lower cost and the advantage of access to other financial services. However, limited banking hours, language barriers, or inconvenient locations may make it difficult for some remittance senders to use these services. Recently, some federal banking agencies have undertaken initiatives to move more remittances through banks and credit unions and bring these senders into the financial mainstream. Research shows that competition in the remittance market has resulted in a drop in the cost of remittances from the United States to Latin America and the Caribbean. The standard costs to a remittance sender are the transfer fee and the foreign exchange conversion fee. The costs vary for different products. For example, on average, most providers we spoke with charge approximately $10 to send $300 to Mexico using the cash-to-cash method, while providers charge less for products such as dual-ATM cards. Disclosures we reviewed from remittance providers included information on the transfer fee, the exchange rate, and the right to a refund. The way this information is presented varies by provider, and a sender may have to do additional work to compare costs across different providers. Some efforts are under way to provide consumers with more aggregate information on the cost of remittances across different providers and products.
Nov 23, 2020
-
Consumer Privacy:
Better Disclosures Needed on Information Sharing by Banks and Credit UnionsGAO-21-36: Published: Oct 22, 2020. Publicly Released: Nov 23, 2020.
Nov 19, 2020
-
Consumer Product Safety Commission:
Actions Needed to Improve Processes for Addressing Product Defect CasesGAO-21-56: Published: Nov 19, 2020. Publicly Released: Nov 19, 2020.
Oct 30, 2020
-
Small Business Loans:
SBA Generally Incorporated Key Elements for Estimating Subsidy Cost of 7(a) ProgramGAO-20-618: Published: Sep 30, 2020. Publicly Released: Oct 30, 2020.
Oct 13, 2020
-
Aviation Consumer Protection:
Increased Transparency Could Help Build Confidence in DOT's Enforcement ApproachGAO-21-109: Published: Oct 13, 2020. Publicly Released: Oct 13, 2020.
Oct 1, 2020
-
Small Business Administration:
COVID-19 Loans Lack Controls and Are Susceptible to FraudGAO-21-117T: Published: Oct 1, 2020. Publicly Released: Oct 1, 2020.
Sep 30, 2020
-
Small Business Research Programs:
Many Agencies' Award Issuances Are Not Timely; Some Practices May Improve TimelinessGAO-20-693: Published: Sep 30, 2020. Publicly Released: Sep 30, 2020.
Sep 28, 2020
-
Intellectual Property:
Additional Agency Actions Can Improve Assistance to Small Businesses and InventorsGAO-20-556: Published: Aug 27, 2020. Publicly Released: Sep 28, 2020.
Jul 30, 2020
-
Small Business Contracting:
Better Documentation and Reporting Needed on Procurement Center RepresentativesGAO-20-462: Published: Jun 30, 2020. Publicly Released: Jul 30, 2020.
Jun 29, 2020
-
Small Business Subcontracting:
Oversight of Contractor Compliance with Subcontracting Plans Needs ImprovementGAO-20-464: Published: May 28, 2020. Publicly Released: Jun 29, 2020.
Jun 22, 2020
-
Small Business Development Centers:
Reevaluation of How SBA Sets Initial Funding Estimate Needed to Help Reduce BurdenGAO-20-457: Published: May 22, 2020. Publicly Released: Jun 22, 2020.
Looking for more? Browse all our products here