Why is it Suddenly So Hard to Send Money Abroad?
June 8, 2017
Veem customer, the Jordan Tourism Board (JTB), was finding it difficult to send money abroad, particularly to Mexico. Anti-money-laundering controls, strict banking policies, payment vendor issues, and now the prospect of greater restrictions and increased taxes were making doing business with Mexico difficult and uncertain.
The JTB shared a widespread fear that has recently grown among both consumers and businesses who send money abroad regularly. Talk of a tax on sending money abroad or even an outright prohibition has caused a surge in the frequency and total volume of international B2B payments.
More people and businesses are transferring money abroad in larger volumes than we’ve seen in some time. Mexico’s central bank, for instance, reported an eight-year high of $2.5 billion in March of this year.
Difficulties with Sending Money Abroad
While the banks are enjoying increased revenues from the surge in wire transfers, their service delivery remains sub par. The JTB tried Citibank, but couldn’t track where payments to Mexico actually were in the process, and would often discover they never went through at all. After much finger pointing, they were asked to simply submit the payment again.
The JTB tried to send money to Mexico via FedEx, but their checks were held up by Mexican customs authorities. They tried Western Union, but their transaction volumes were too low. The time and money the JTB was losing mired in the process of sending money abroad was growing, and a cloudy political future in the U.S. was putting a strain on his partner relationships.
The Impact on Small Business
Veem CEO Marwan Forzley recently shared the JTB’s story of problems sending money abroad, particularly to Mexico, with recode. In it, he explains the impact that uncertain policies around sending money abroad have on small businesses: “News that an administration might alter the tax landscape of international payments catches the ear of small business importers and exporters,” he says. “When a small business like the JTB pays 50 invoices ranging from $1,400 to $6,000 per year to companies in Mexico, navigating the murky waters of international policy becomes a $30,000 proposition”.
For a small business, that’s a significant impact.
Read the full article here: Trump’s Policies are Making it Difficult to Wire Money Abroad.