Money transfer booms in Nigeria.
From a small-scale level in 1993, money transfer has become big business in Nigeria. Companies like Western Union Money Transfer, MoneyGram Payment Systems, CashData and United Parcel Services are competing furiously for their slice of the market.
While some companies, like CashData, concentrate on business within the country, the current thriving money transfer industry has gone international, using a global computer network to move money all over the world.
Money transfer services became necessary due to changes in Nigeria's social and economic environment. Globalization and the emigration of young Nigerians to more developed countries in search of employment and self-development have created an increasing need to provide a way to send money home safely and easily.
Before the introduction of electronic money transfer, mail and courier services were the only real option. But high levels of theft and corruption by unscrupulous employees of courier companies and the Nigeria Postal Services (POST) meant there was no guarantee parcels would reach their destination.
The introduction of electronic transfer services were a huge relief for Nigerians living abroad wishing to send money to support their families, invest in business and execute projects in Nigeria. It is widely believed that these services are the safest means of transferring money from country to country.
At the forefront of the industry are Western Union Financial Services International (WUFSI), working with First Bank Nigeria Plc. to render money transfer services in Nigeria. First Bank's Chief Executive Officer, Chris Adimoran, said the partnership between his bank and WUFSI had eased the pressure on the Autonomous Foreign Exchange Market (AFEM). The bank has been able to satisfy most of its foreign exchange needs through the alternative provided by Western Union.
"Indeed, some other banks that used to be top AFEM bidders are now taking a cue from First Bank. Millions of dollars that might not have been remitted to Nigeria, in view of the uncertain nature of international business, is now being invested in Nigeria to develop the country's economy," he said.
Western Union money transfer is a consumer service that allows individuals to electronically transfer funds through a global network of more than 48,000 locations in over 150 countries world-wide.
One can send money from one country to another an have it ready for collection within minutes. The sender simply takes the remittance to any Western Union agent, fills a form providing details about the beneficiary and pays a small service charge. The transfer is entered into the Western Union Global Computer system and the funds become immediately available for collection at the receiving end.
Recipients complete a simple form, which gives details about themselves and the sender. This will enable the bank, Western Union's agent, to locate the transfer in the Global Computer system. With proper identification, the money sent will be paid in the local currency at a competitive market related rate for the US dollar.
The American company, MoneyGram Payment Systems Inc, is one of Western Union's main competitors. In 1997, MoneyGram entered into a partnership with United Bank of Africa (UBA) Plc to bring the international money transfer service to Nigeria.
According to an official at UBA, MoneyGram offers one of the most reasonable exchange rates and there is a conscious effort to make the exchange rate of the Naira attractive. She pointed out that paying a higher rate than the competition gives the beneficiary or the receiver higher value for his or her money at home.
The law currently only allows the transfer of inward funds but there are hopes that outward international transfers may come later. According to the UBA official, inflow volume through MoneyGram grew by 65% in 1998.
MoneyGram's slogan, SAFER, an acronym for Secure, Accessible, Fast, Easy and Rates, applies to almost all electronic money transfer services. It is simple: when money is electronically transmitted through the global computer network, delivery is faster and more secure.