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At Kerry, Bayh Urging, Western Union and MoneyGram Agree to Modify Practices on Money Transfers to Haiti

WASHINGTON, D.C. – After strong urging from Senators John Kerry (D-Mass.), Chairman of the Foreign Relations Committee, and Evan Bayh (D-Ind.), Chairman of the Banking Subcommittee on Security and International Trade and Finance, Western Union has agreed to reduce fees on money transfers to those devastated by last month’s earthquake in Haiti, and MoneyGram will contribute a small amount to relief efforts when a remittance is sent.  MoneyGram’s relief contributions will continue through June, and Western Union will maintain its reduced fees through the end of the year.
Last month, Senators Kerry and Bayh called on the two companies to reduce or eliminate fees on remittances to Haiti through June 2010 at a minimum.
“It’s essential that MoneyGram and Western Union step up to do what’s right in this moment of devastation in Haiti,” said Chairman Kerry.  “I appreciate both companies’ responsiveness to date, but there is much more to be done across the board.  I plan to work with all parties and the Administration to find the best ways to get Haitians the support they desperately need.”
“All of us have a responsibility to help those in need during a humanitarian crisis,” Bayh said.  “While Western Union and MoneyGram are acknowledging the need to help alleviate the suffering in Haiti, I hope the companies will continue to ensure the money sent  through their services goes directly to those who need it the most.“

The full text of Western Union’s and MoneyGram’s letters are below:
Senator John Kerry
United States Senate
Russell Senate Office Building 218
Washington, D.C. 20510
Senator Evan Bayh
United States Senate
Russell Senate Office Building
Washington, D.C. 20510
Dear Senator Kerry and Senator Bayh:
Thank you for your letter dated February 22, 2010 and for your interest in Western Union. On behalf of Western Union, I share your concerns with the need to help Haiti recover and rebuild from this terrible disaster. I am pleased to inform you that as of February 15, 2010, Western Union reduced its pricing structure for money-transfers sent to Haiti from the United States, Canada, France, Italy, Spain, Germany, Belgium and Switzerland; these select markets represent approximately 95% of Western Union's total business to Haiti. Western Union will continue to offer reduced transfer fees on money transfers being sent to Haiti from these markets through December 31, 2010.
Through Western Union, the Western Union Foundation, our Agents and our employees, we have contributed over $2.2 million of philanthropic support for disaster relief efforts in Haiti. Additionally, Western Union expended more than $2.6 million in in-kind donations, which include the "No Fee Money Transfer" program. Western Union send Agents also contributed an in-kind donation of over $545,000. Combining Western Union's philanthropic support with the in-kind contributions, Western Union and our Agents contributed over $5.3 million to-date to help Haiti recover and rebuild.
As we communicated to your staff, the revised pricing structure reduces transaction fees from pre-earthquake levels. For example, pre-earthquake, the average transaction fee for a customer sending funds to Haiti from the United States was 8.9%. Effective, February 15, 2010 a customer sending funds to Haiti will pay transaction fees as follows: a customer sending up to $55 to Haiti from the United States will pay a transaction fee of $4.99; a customer sending approximately $150 to Haiti from the United States will pay a transaction fee of 8%; a customer sending approximately $200 to Haiti from the United States will pay a transaction fee of 6%; a customer sending approximately $500 to Haiti from the United States will pay a transaction fee of 2.4%. In Haiti, Western Union pays out in USD; therefore there is no foreign exchange involved in a money transfer that is sent from the United States to Haiti. Western Union transaction fees are available to the public at or at 1-800-325-6000.
Western Union does not employ our Agents, nor do we own the Agent locations. These Agents are typically independent local business owners who offer Western Union money-transfers as part of their business operations. Western Union Agents receive a commission on every transaction sent or received from their location. Agent commissions are derived from the transaction fee as well as any gain associated with the foreign exchange. Western Union pays out in USD in Haiti. As a result, Western Union Agents in Haiti and the United States rely on the transaction fee charged to each remitter as their primary source of income resulting from offering our products.
Consequently, when Western Union offers a "No Fee Money Transfer," our independent Agents, and not just the corporation, lose income. Considering the substantial economic losses in Haiti, Western Union believes that compensating our Haitian Agents for their business is critical now more than ever.
And, as the United States continues to recover from the economic recession, Western Union Agents in the United States must be able to operate at a profit in order to strengthen their own businesses.
Prior to the January 12th earthquake, Western Union had more than 400 Agent locations in Haiti.
Following the earthquake, Western Union has 205 Agent locations operating across Haiti; including 90 Agent locations in greater Port-Au-Prince. We continue to work around-the-clock to reopen additional locations throughout Haiti.
Western Union understands the importance of remittances to Haiti in normal times and we understand the vital role remittances will play in redeveloping the country. We know that it is essential for Haitians and their loved ones to maximize the value of their remittances. Western Union's revised price structure and our promise to continue it through December of 2010 reflects our commitment to helping Haiti recover from this unprecedented disaster. Please let me know if I can be of any further assistance to you or your staff.
Warm Regards,
Christina Gold
President & CEO
The Western Union Company
Senator John Kerry
United States Senate
218 Russell Senate Office Building
Washington, D.C. 20510
Senator Evan Bayh
United States Senate
131 Russell Senate Office Building
Washington, D.C. 20510
Dear Senator Kerry and Senator Bayh:
In response to your letter regarding the devastating earthquake that has impacted Haiti and its people, we wanted to address several of your inquiries. MoneyGram, like so many others around the world, feels deeply for the loss of life and personal distress that this natural disaster has caused. To this concern, MoneyGram has mobilized considerable resources to support the people of Haiti and we are committed to continuing that effort Immediately following the devastating earthquake, MoneyGram began to assess the situation, determine impact to our agent partners, and put a program in place to help the people of Haiti.
Our response to Haiti included an immediate grant to the Pan American Development
Foundation for the urgent supply of food and water and implementation of a $1 or equivalent money transfer fee for transactions to Haiti from anywhere in the world. This pricing was an effective way for consumers to maximize support to loved ones during the most critical days following the earthquake. Our in-kind donation for this program totaled $250,000. In addition, we created a program to enable consumers in the United States to make a free donation using our bill payment platform to the American Red Cross. To date, that program has facilitated more than 2,500 donations worth more than $85,000.
We know that our consumers expect us to provide the best service at the best price, and we strive to deliver this balance to help our customers each and every day. In your letter to MoneyGram and our competitor, you stated that fees generally range from 7%-9% of the amount transferred during periods of normal operation. I think it is important for you to know that prior to the earthquake MoneyGram's average fee per money transfer transaction to Haiti was Jess than 3% of the amount transferred. We believe this is a further indication of the commitment MoneyGram has made to Haiti-a commitment made long before the earthquake ravaged the country.
After February 14, we returned to our everyday low pricing schedule and began to donate to the
American Red Cross Haiti Relief fund $2 of the fee we receive for every transaction sent to
Haiti. MoneyGram's average fee per transaction after returning to our everyday low price is
2.4% of the face amount sent. This percentage is before taking into account the additional $2 donation which further reduces this percentage. We will continue to promote this program until June 3, 2010.
The decision to return to our everyday low price and contribute a $2 donation was made in conjunction with our agents in Haiti and the U.S., who rely on a portion of the consumer fee to run their businesses. Prior to the earthquake, our agent network in Haiti totaled 112 locations.
Of those, 81 locations have been restored to fully operational levels, and 20 locations were
permanently destroyed. We are working with our agents on a daily basis to restore the remaining locations to fully operational levels. Transaction volumes for MoneyGram and our agents in Haiti remain below transaction volume levels prior to the earthquake. MoneyGram does not employ our agents nor do we own the agent locations. These independent business owners choose to offer MoneyGram services and in return receive a commission-paid out of transaction fees-for transactions sent and received from their locations. As you can imagine, these are critical funds that help provide jobs and income to employees, a secure environment for the receipt funds and significant infrastructure investment in their operations. Without this important stream of income, the survival of these businesses may be at risk. We remain dedicated to ensuring that the best possible service to Haiti remains available around the globe.
MoneyGram and our agents in Haiti are committed to delivering an affordable, reliable and convenient remittance service when, where and how Haitians need it. We believe our actions, both before and after the earthquake, are the appropriate approach for a company of our , and these actions balance our commitment to all our constituents around the world: consumers, agents, employees and shareholders. Thank you again for your support of our efforts.
Pamela H. Patsley
Chairman and CEO
MoneyGram International