On Wednesday, news leaked that Western Union is in talks to acquire its smaller rival MoneyGram, a move that WorldRemit believe would affect Africa, considering its profound consequences for competition in the remittance market.
WorldRemit’s founder and CEO, Ismail Ahmed, said: “Western Union is reported to be in talks to acquire its largest competitor MoneyGram. If the deal is approved, it would create a monstrous monopoly that would impact the livelihoods of millions around the world.
Separately, these two companies operate what former UN secretary general Kofi Annan calls a remittance “Super Racket”. According to the Africa Progress Panel, the two companies are engaged in anti-competitive practices to maintain their market position. Their extortionate fees amount to an annual ‘super-tax’ costing Africa alone an estimated $1.8 billion every year. In many corridors, the merger would eliminate the limited competition that currently exists.
Online services such as WorldRemit are drawing away their customers with greater convenience and honest pricing, but more than 95% of remittances are still sent offline, primarily through these two companies. We call on regulators to block this deal unconditionally – in the interests of migrants and expats around the world who rely on international money transfer services to support friends and family in their homelands.”