More than three years ago, I wrote a study of Armenian migration and remittances around the world. (Here are the two papers that research generated.) At the time, one of the complaints I heard from many sources were the high prices charged for remittances by Western Union. The only reason I could find for the higher prices was the ubiquity of WU around the world, with over 320,000 offices. An article in Wednesday's NYT suggests it has "five times as many locations worldwide as McDonald�s, Starbucks, Burger King and Wal-Mart combined."

Stung by the criticism, Western Union now ties its future to immigration and has become a champion for open borders.

Having once stressed efficiency (�the fastest way to send money�), Western Union now emphasizes the devotion the money represents. One poster pairs a Filipino nurse in London with her daughter back home in cap and gown, making Western Union an implicit partner in the family�s achievements. �Sending so much more than money� is a common tag line.

The company sponsors hundreds of ethnic festivals, concerts and sporting events, from cricket matches for Indians in Dubai to sack races for Jamaicans in Queens. Last year it paid a Filipino pop star, Jim Paredes, to record a Tagalog song urging migrants to send money home. It paid the producers of a Bollywood film, �Namastey London,� for a scene in which a Western Union wire transfer helps rescue the heroine.

The Western Union agent in Panama played the rescuer�s role himself. With many of his customers illegal immigrants � mostly from Colombia � he put three lawyers on retainer and started a radio show. The lawyers answered callers� questions and scheduled free appointments to get them legalized.

�Every time an immigrant is forced outside the country, we lose a potential customer,� said the agent, Jaime Lacayo, who provided the legal services for two years and still runs the radio show. �We have participated in many marriages of foreigners marrying Panamanian ladies, because that is the best way to legalize your status.�

Fees have dropped, but along with this are concerns about the use of the system by illegal aliens and by terrorist groups. A slowing economy in the US has slowed the growth of remittances according to this survey from July. So if you want to place bets on the immigration debate (along with the state of the US economy), you can either go long or short in WU.

In the Armenian case, WU still has the lion's share of the market for remittances from everywhere else (there's one decent competitor making some inroads), but the ex-Soviet remittance market -- which is a majority of the market -- is picked up by banks with ties to either the old Soviet savings bank or postal bank systems. If competition works elsewhere, WU still has the largest network.

Side note: cool graphic from the Times on remittances from the US to the world.

Labels: economics, remittances