Romanians overseas boost money transfer market

The money transfer market in Romania amounted to $3.5bn (3bn euros) last year, the bulk of which was in the form of foreign currency inflows, the money transfer company Western Union announced.

“Transfers are on the rise,” stated Christina Gold, Western Union Financial Services chairperson on Monday.

The 3bn euros include all types of transfers to and from Romania, with the “grey market” also considered, as explained by Alexandru Badulescu, Western Union’s chief executive for Romania and Moldova.

“The main source countries for the transfers to Romania are Italy, Spain, USA, Germany and France,” Badulescu added.

Western Union’s estimate is almost twice as high as the official data from the National Bank, which point to 1.7bn euro inflows last year.

The average transfer through Western Union to Romania is worth $300-$500, according to Badulescu. Western Union officials would not provide details on how the company is doing in Romania.

“For Western Union, Romania is one of the top five countries in Central and Eastern Europe,” said Hikmet Ersek, Western Union’s senior vice-president for Europe, the Middle East, Africa and South Asia.

Western Union’s archrival is MoneyGram. As far as the Romanian market is concerned, MoneyGram’s services are available through Banca Comerciala Romana (Romanian Commercial Bank – BCR), Banca Tiriac and Mirobank.

The most important market for the operators of money transfer services to Romania is Spain, followed by Italy, Germany, England and Israel, according to Cosmin Brendea, a representative of Smith & Smith, a company specialising in money transfers. A significant market for this company is Portugal, which hosts a powerful community of citizens from the Republic of Moldova. Its 5% market share makes Smith & Smith the third leading operator on the market in terms of transfer volume.

The money transfer market has been following a strong upward trend as of early 2000; the growth anticipated for 2004 stands at approximately 12% – at least $3.9bn, according to Brendea.

Smith & Smith doubled its business since 2003 by expanding its agent network. It expects business to progress at least as much as the market this year, and predicts an increase in the transfers from Middle Eastern countries, such as the United Arab Emirates or even Iraq.

Western Union also announced on Monday that considering the market value and the needs and requests from customers, it would complement its payment services in dollars and ROL with payment in euros.

The introduction of the new service will enable customers that are sent cash in euros collect the money in euros, with the fee paid by the sender.
alexandru.cerchez@zf.ro