24
World Bank Working Paper
Table 2.4. Comparison of Costs to Remit ₤300 (US$605) from United Kingdom to Uganda Product
UK Fees (₤)
Time
MIMb
27.00
10 min.
3.39
MIM (agent)
27.00
10 min.
2 days (agent)
14.90
10 minutes (online)
Masterlink Masterlink (Transfer to bank account)
RSP Western Union
MoneyGram
Barclaysd
Forex Fees in Spreada (%) Uganda
Total
Equivalent (US$)
%
0
37.17 (₤)
74.91
12.4
3.39
0
37.17 ₤
74.91
12.4
2 days
3.39
0
25.07 ₤
50.48
8.4
9.99
10 min.
2.67
0
18.00 ₤
36.28
6.0
-
None
1 min.
6.15c
0
18.45₤
37.18
6.2
-
None
1 min.
6.15
5,000 (UGX)
18.45 ₤ + 5,000 (UGX)
40.24
6.7
Standard
20.00
Up to 8 days
4.3
5.00 (US$)
32.90 ₤ + 5 (US$)
71.30
11.8
Priority
35.00
Up to 7 days
4.3
5.00 (US$)
47.90 ₤+ 5 (US$)
101.53
16.8
a Forex spread between wholesale rate and a rate applied by each RSP. It is important to note that not all providers have access to wholesale rates. b Money in Minutes (MIM) service is provided online. c Masterlink charges are included in the forex spread. d sendmoneyhome.org. Note: Periodically updated remittance prices are available at online databases such as the World Bank’s remittance prices database (http://remittanceprices.worldbank.org), Sendmoneyhome (www.sendmoneyhome.org), and MoneyMove (www.moneymove.org). Sources: Internet research, direct phone calls, MTO brochures, and sendmoneyhome.org.
However, users should visit each Web site independently for comparison of fees and other information. This service is relatively new to the financial industry and has had rapid development in the United States. Since 2008, the World Bank has a database on remi ances prices. The database is updated periodically and expanding its coverage now to one hundred and seventy-eight county corridors, as of first quarter of 2010. Among the three corridors, price data in the United Kingdom–Uganda corridor is available in the database.22 Remittance Costs: South Africa
All banks apply flat rates with minimum and maximum amounts for remi ances while MTOs have a fee structure based on principal amounts. Bank remi ance fees at the counter range from ZAR150 to ZAR205. Banks charge commission for currency conversion, telegraphic transfer fees, and foreign exchange spread conversion from South African rand to United States dollars.23 The receiving bank in Uganda charges administrative fees ranging from US$10 to US$25 and foreign exchange spread from United States dollar to Ugandan shilling. In the past few years, remi ance costs from South Africa have declined by US$5 (MoneyGram) and up to ZAR80 (banks) for remi ances of US$200 or equivalent. Table 2.6 provides a comparative picture of the fee structures of major remi ance service providers.