Ismail Ahmed, Founder and CEO, WorldRemit, an online money transfer service says that a possible merger of Western Union and MoneyGram, two of the global remittance industry’s biggest players, “would create a monstrous monopoly.”
Ahmed made the comments amid reports that Western Union was in talks to acquire rival MoneyGram underscoring that if closed, the deal could undermine the limited competition that exists in the world remittance industry.
“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”, the WorldRemit CEO says.
[blockquote right=”pull-right” cite=”Ismail Ahmed, Founder and CEO, WorldRemit”]“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”[/blockquote]
According to him, Africa will be most hit by the deal, which he reckons would have “profound consequences for competition” among remittance market players.
Ahmed says that, “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.”
He adds that, “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.”