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.