IRnet: Helping Members Save When Sending Money Internationally

Every day, immigrants send money home to family members in their native countries. And every day, wire transfer services such as Western Union and MoneyGram charge exorbitant fees on immigrants' hard-earned money--fees of up to 28% of the transfer amount.

But, Fairfax County Federal Credit Union now is offering a safe, rapid, and inexpensive alternative. The World Council of Credit Unions (WOCCU) in Madison, Wis., developed the International Remittance Network, or IRnet, which allows members to send money to credit unions in their native country at fees as low as $10 and competitive exchange rates. Funds arrive at a credit union nearest to the recipient within minutes.

Currently, IRnet services are available in more than 40 countries in Latin America, Asia, Africa, and Europe. Remittances are crucial to these countries' economies, as the funds are used in basic daily consumption.

"In El Salvador, remittances constitute 12% of the gross domestic product--the size of our health-care industry," says Dave Grace, financial services manager at WOCCU. "In Mexico, remittances are the second-largest dollar-earning industry, behind oil."

The potential impact of these remittances is weakened not only by exorbitant fees but also by poor exchange rates money transfer companies offer immigrants. The House of Representatives last year reintroduced the Wire Transfer Fairness and Disclosure Act. Citing the fact that Western Union has derived $55.80 in profit from the exchange rate alone on a $500 transfer, the act seeks to ensure that each electronic wire transmission customer is aware of all commissions and fees and is clearly quoted the correct rate of exchange.

WOCCU is working with other credit unions in the U.S. and other countries to extend IRnet service in the near future.