Send Money Pacific reduces cost of remitting money
By Unumoe Esera
The cost of remitting money from New Zealand and Australia to Samoa and other Pacific Islands has been reduced through services provided by Send Money Pacific – an initiative by NZ Aid and Aus AUD.
Send Money’s Website was launched in 2009 and was part of the New Zealand Pacific Remittance and Financial Capability (Money PACIFIC project).
The initiative was to reduce the cost of sending money as they were quite high at the time and to create more transparency.
The New Zealand Pacific Remittance Project is a joint effort between the Reserve Bank of New Zealand, Ministry of Pacific Island Affairs, Ministry of Foreign Affairs (NZ Aid), Aus Aid in cooperation with the World Bank.
“This project started in 2007 when the World Bank in Sydney had discovered that it was costing money to send to the Pacific,” said Kim Hailwood, Project Director of the Ministry of Pacific Island affairs. She emphasized the importance of teamwork as some of the organisations that had worked together on this project had never worked together before.
In 2008 when the proposal to setup such an organisation was made the prices of remittances were between 15-25 percent the cost of transactions and the project goal was to reduce it from 5-7 percent.
According to Jonathan Capal, Regional Manager for Developing Markets Association that there has been a consistent fall the in cost of remittances to Samoa sent from Australia and New Zealand.
In April 2012 the overall costs to send $200 Australian dollars transfers to Samoa have decreased from AUD $56.87 to AUD$42.78 which is a decline of over 25 percent. For New Zealand $200 the overall costs dropped down from NZD$37.83 to NZD$25.68 which was a percentage decline of 32 percent.
For the Money Transfer Operator, costs from New Zealand and Australia have fallen from AUD$28.95 to AUD$15.88 – an actual decline of over 45 percent. For New Zealand to Samoa, the cost of transfers have dropped from NZD$23.38 to NZD$14.05 – a percentage decline of over 40 percent.
The World Bank Global Remittances Working Group had also set up a target in 2009 to reduce the global average costs of transferring remittances from 10 percent to five percent in five years. Samoa has achieved that target as the transfers from Australia to Samoa of AUD $500 sent through money transfer operators in now 5.28 percent while from New Zealand is just 3 percent.
New product and technologies such as online and mobile phones remittance based systems and prepaid remittances bank cards have also lowered the costs of remittances and created competition amongst banks and other money transfer operators which benefits the customer.
Mr Capal said Send Money Pacific has helped to promote transparency of remittances services by providing the total price including the fees, the foreign exchange rate and charges paid by the receiver. Also provide an important service which saves costs for the consumer and improve the overall image of remittance industry. Also encouraging competition in the New Zealand and Australia and Pacific corridors and providing information and regional news for Pacific communities living in New Zealand and Australia.
Nine Pacific island countries are involved with Send Pacific Money. They are Fiji, Kiribati, Papua New Guinea, Solomon Islands, Tonga, Tuvalu, Vanuatu and Samoa.