Australia: Banks charge islanders 55c in the dollar to remit money

Florence Chong September 14, 2007
THE World Bank has urged Australian financial institutions to lower transactions fees on remittances by Pacific Island migrant workers.
Pacific Island communities in Australia and New Zealand were charged fees ranging from 15 to 50 per cent for each transaction, the Washington-based bank said.
Remittances to the Pacific region tripled over the past decade to reach $US425 billion last year - half of which originated from Australia and New Zealand, the most recent figures show. Collectively, they remitted at least $260 million last year from Australia and New Zealand, through Australian banks and money transfer operators.

The bank's Sydney-based chief economist for the Pacific region, Manjula Luthria, said yesterday that these workers were paying up to 55c for every dollar they sent home.

For every $100 sent, she said, they paid $35 in remittance fees, $15 for "pick-up fees" and other foreign exchange charges, which could take the total fees charged to about $55 for each transfer. [Read more]