Without a blink of an eye I would say yes, we should waive remittance fees during times of crisis. But for us to fully understand and quantify the scope of remittance fee savings, we first need to understand the money audit trail.
Let’s begin with where does the money come from? The global response to humanitarian crisis is a collective outpouring of help from communities, organizations, national and international governments, each facing a range of choices about how, where, when and how much they contribute to meet humanitarian aid. The largest donations come from today’s richest countries and the 5 largest donors are the United States, the EU institutions, the United Kingdom, Germany and Sweden.
Now let’s discuss how the funding gets to the country in need. Humanitarian funding follows a variety of pathways and incurs numerous remittance fees while passing through multiple transactions between donors, funds and delivery agencies en route to crisis affected regions. For a more detailed analysis let’s use some known statistics from 2010. In 2010 humanitarian response to crisis amounted to $13 billion. According to the World Bank sending remittances costs an average of 9% of the amount sent. So in 2010 we could have saved $1,170,000,000 billion dollars in remittance fees! That is one large chunk of money that could have been used to save lives.
Reducing and/or eliminating remittances fees during times of crisis is the ethical thing to do. During the aftermath of Typhoon Haiyan the following banks waived remittance fees (for a specified period) for money transfers to help with Philippine Humanitarian Aid:
Western Union, Wells Fargo, Xpress Money, Noor Islamic Bank, Luminus, BDO, PNB, Metrobank, RCBC, the BMO Bank of Montreal and the Royal Bank of Scotland.
The following members of the financial services industry did not waive remittance fees but did dedicate millions of dollars in donations to humanitarian agencies assisting relief efforts in the Philippines:
BNY Mellon, Citi, MasterCard, Webster Bank, TD Bank, ING US, Capitol One, GE Foundation, Discover and HSBC Philippines.
An abundance of gratitude is owed to these financial institutions and to everyone who stepped up to the plate in providing assistance to the Philippines.
Imagine what would happen if 5 of the largest banks worldwide waived remittance fees during times of crisis? Namely ICBC, HSBC, Deutsche Bank, Credit Agricole and BNP Paribas.
Imagine if the billionaires of our world collaborated to create a Non Profit Bank that benefited humanitarian agencies and NGOs? One that would facilitate and/or waive remittance fees? One that would provide guidance and counseling services to NGOs regarding checking, savings, CDs, endowments, annuities, tax exempt financing, capital campaigns and bridge loans?
One can dream that one day the top tier of our world will collectively play a larger role and become a force in shaping how the financial industry addresses humanitarian needs during times of crisis.
By Tina Cornely