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					    June 2006                    Issue:                 International Association of Money Transfer Networks Newsletter                                      

                                                     Promoting a better understanding of the
                                                     money transfer market.
Money Transfers Newsletter
                              IAMTN                                                                    worldwide.

                                                                                                                                                  Your success is our success....
                              6.03 Exchange
                              Tower One Harbour
                              Exchange Square
                              London, E14 9GE
                              T: +44 020 7531-1347
                                                                                                       T   he IAMTN aims to improve col-
                                                                                                           laboration amongst all money
                                                                                                       transfer networks and banks to en-
                              E:                                                        sure a cohesive approach is taken by
                                                                                                       the industry in response to changing
                                                                                                       legislation and the need to promote
                                                                                                       greater transparency in ways that are
                                                                                                       effective, yet non discriminatory.

                                                                                                       F   rom our inception in January we
                                                                                                           have already begun the process
                                                                                                       of lobbying both the Treasury and
                                                                                                       European Parliament. Our members
                                                                                                       have set out a clear agenda of issues
                                                                                                       to tackle and we have hosted a series
                                                                                                       of meetings and seminars to promote
                                                                                                       a better understanding of the legisla-
                                                                                                       tion and to formulate a process for
                                                                                                       response. We believe very strongly
                                                                                                       that the money transfer networks
                                                     Lady Olga Maitland, CEO of the IAMTN.             deserve a fair and just profile and that
                                                     “We believe we should be harnessing every-        the legislation should recognise the
                                                     one’s experience worldwide, to ensure a fairer,
                                                     more just and cost effective service for all.”
                                                                                                       important role played in the worlds

                                                                                                       W     ith a tight schedule ahead of us

                                                     W      ith an estimated 175 million                     we shall keep you informed of
                                                            people living outside of their             progress through this, our monthly
                                                     home country, the money transfer                  newsletter. Together we can raise the
                                                     market is worth some £250 billion                 profile of the money transfer industry
                                                     a year annually, yet despite some                 and develop a fair and cost effective
                                                     trillions of dollars transferred glo-             service for all.
                                                     bally each year remains one of the                Lady Olga Maitland
                                                     least understood and discriminated
                                                     against sectors of the financial

                                                     T   he latest EU Payment Services
                                                         Directive’s Proposal will hit every
                                                     bank and every money transfer op-
                                                                                                       Forthcoming Events
                                                     erator sending money from Europe
                                                     to all over the world and poses a

                                                     real risk of driving money transfer
                                                     operators out of business, due to
                                                                                                           30th October 2006
                                                     burdensome red tape. This in turn,                  IAMTN 2nd Global Consumer
                             1. IAMTN develop-       will lead to unnecessary additional
                                ments & dates.       charges for the end customer remit-                 Money Transfers Conference.
                             2. Interview with       ting much needed funds to friends                     Mandarin Oriental Hotel
                                Gagik Zakaryan       and families in their home country.
                             3. International
                                Money Transfers
                                                     I t is against this backdrop that we
                                                       have founded the International
                                                     Association of Money Transfer Net-
                                                                                                                  Chaired by:
                             4. Comment on           works (IAMTN) to promote a better                       Lord Norman Lamont
                                Industry issues.     understanding of the money serv-
                                                     ices business and lobby the inter-                    To attend: contact IAMTN
                                                     ests of the money transfers industry
                            2                             Ed et prat dunt loreet vendreril eugiamet wis nostrud Newsletter
                                                          International Association of Money Transfer Networkstis ea facip                          Duis #0
                                                                                                                                                    Issue:                    June 0000
                                                                                                                                                                               Illum 2006

                                                       Economic growth and an increasing reliance on

                                                                                                                                                                         International Profile
                                                       immigrant workers set to fuel growth in the Russian
                                                       Money Transfer Market.                                                                 Russia faces a growing
                                                       Interview with Gagik Zakaryan,                                                         demographic problem.
International Association of Money Transfer Networks

                                                                                                                                              With a falling birth
                                                       Chairman of Unistream                                                                  rate and an expanding
                                                                                                                                              economy it will be in-

                                                       G   raduating from Moscow Aviation
                                                           University, Gagik initially started
                                                       in business importing computer
                                                                                                                                              creasingly reliant upon
                                                                                                                                              immigrant workers to
                                                                                                                                              fuel economic growth.

                                                       equipment and consumer goods.
                                                       “Back then, there simply wasn’t the
                                                       time to follow a career in aviation.”
                                                       he explained “there were so many
                                                       opportunities to pursue and business
                                                       consumed all of my available time.”

                                                       C   o-founding Uniastrum Bank with
                                                           his University friend; George Pisk-
                                                       ov in 1994, Gagik still managed to re-
                                                                                                                                              The Russian banking
                                                                                                                                              system is still evolving
                                                                                                                                              and is immature com-
                                                                                                                                              pared to other leading
                                                       tain some aviation interests; playing a                                                economies. Ripe for
                                                       founding role in the development of                                                    expansion; only some
                                                       Trans-aero; now one of Russia’s lead-                                                  20% of the population
                                                       ing airlines who recently announced                                                    fully use the banking
                                                                                                                                              products available.
                                                       scheduled flights to London.

                                                       Y    ou begin to get a sense that Gagik
                                                            is the sort of Entrepreneurial lead-
                                                       er who will succeed in whatever field
                                                       he chooses. “When we founded the
                                                       bank we initially focused on corpo-
                                                       rate and SME business and only took
                                                       the decision to move into the retail        “We have a 16% share of the Money Transfer Market in Rus-
                                                       market some 6 years ago.” Since that        sia” says Gagik “second only to Western Union. In launching
                                                       time Uniastrum Bank has gone from           Unistream as a separate business we believe it is better
                                                       strength to strength and now has a          placed to realise the market opportunities available and be
                                                       network of over 100 branches across         more capable of attracting the inward investment that will
                                                       Russia, 25,000 points of sale in some       be required.
                                                       80 countries worldwide and it offers
                                                       its 500,000 (and growing) customers
                                                       the full range of retail services includ-
                                                                                                   W     ith only 20% of the Russian population using bank-
                                                                                                         ing services to the full, you can see that Uniastrum
                                                                                                   and Unistream are set for significant growth. “We expect
                                                       ing mortgages, vehicle loans, credit        to double our volumes each year for the next two years as
                                                       card facilities and money transfers.        we build a stronger corporate management structure and

                                                       M    any of our competitors are only        establish our bank internationally.” he says “which will take
                                                            interested in opening branches         us to some $6 billion in transactions with a 30% domestic
                                                       in Russia’s largest cities” he says “Yet    share.”
                                                       Russia has a vast land mass, with
                                                       people dispersed widely who all need
                                                       access to financial products.
                                                                                                   S  ome how you just know the bank will reach its growth
                                                                                                      objectives, yet there’s a real sense that despite this the
                                                                                                   banks values are strongly rooted in the people it serves.

                                                       D    emographically Russia is facing a
                                                            real problem. With a falling birth
                                                       rate it is becoming increasingly de-                “ It’s about bringing
                                                       pendent on labour migration and the
                                                       attraction of immigrant labour to fuel          convenience and accessibility
                                                       its economic growth. It is in response
                                                       to this trend that Uniastrum Bank has
                                                                                                          to the lives of ordinary
                                                       recently announced the launch of its               people across Russia.”
                                                       Unistream Money Transfer business as
                                                       a stand alone subsidiary to the bank.

                                     In Brief                     LUUP launches m-payments service in the UK
International Money Transfers News
                                     Karnataka deal with
                                     Bank of India                A new payment scheme allows customers to use their mobile phones
                                     A principal agent for        to make funds transfers has been launched in the UK and Germany.
                                     Western Union Money
                                     Transfer Services, Karna-
                                                                                                                The LUUP system - formerly known

                                                                                                                                                          International Association of Money Transfer Networks
                                     taka Bank is to provide
                                     inbound money transfer                                                     as Contopronto, is independent of
                                     services across 750                                                        mobile phone operators and allows
                                     Bank of India branches.                                                    consumers to use their mobile phone
                                     They expect a 20-30%
                                     increase in remittances                                                    as an electronic wallet, connected
                                     in the next couple of                                                      to a credit card, debit card or bank
                                     years.                                                                     account. Customers can then use the
                                     Web based
                                                                                                                phone to buy down loads and send
                                     Instant Money Order                                                        money to other account holders.
                                     IMO (Instant Money           Mobile technology set to drive change.        Coinstar buys
                                     Order) is a web based
                                     instant money transfer                                                     Travelex money
                                     service between two
                                     individuals within India                                                   transfer business.
                                     and is a service being
                                     provided by the Post Of-
                                                                                                                UK non-bank foreign exchange
                                     fice from 24 IMO centres                                                   operator Travelex has sold its money
                                     in 11 cities across India.                                                 transfer subsidiary to US based Coin-
                                                                                                                star for $27million. Travelex Money
                                     NetEconomy signs 12
                                                                                                                Transfer (TMT) was founded in 2003
                                     to AML technology
                                     The Erase Financial
                                                                                                                and now operates in 138 countries
                                     Crime Suite is a system                                                    and an agent network in more than
                                     which manages account                                                      17,000 locations. TMT will continue
                                     opening procedures                                                         to operate independently as a wholly
                                     and monitors financial
                                     transactions. It alerts
                                                                                                                owned subsidiary of Coinstar headed
                                     users of any suspi-                                                        by Mohit Davar.

                                                                                                                Neteller expands in
                                     cious or illegal activity
                                     and has attracted new
                                     customers such as Bank
                                     of Baroda, Royal Bank of                                                   Europe and Asia
                                     Canada (RBC) and AXA
                                     Banque France.
                                                                                                                UK on-line payment transfer firm
                                                                                                                Neteler is launching German, Span-
                                     International Pay-                                                         ish, Italian and French versions of its
                                     ment Systems Confer-                                                       service as well as a new payments
                                     ence held in London.
                                                                                                                platform, called 1-Pay, in Asia. With a
                                     Over 400 delegates
                                     from the global pay-
                                                                   With the advent of m-payments services       global user base of 2.6 million cus-
                                                                   being launched by PayPal, LUUP, OboPay and
                                     ments industry at-                                                         tomers and 3,400 merchants across
                                                                   most recently, Vodafone, money transfers
                                     tended the 14th annual        enter a new phase in accessibility.          160 countries the company is looking
                                     conference in London.                                                      to drive adoption of its services and
                                                                                                                has undergone extensive testing dur-
                                                                                                                ing the last quarter.
                                     OboPay launches m-payments
                                     service in US
                                     Based in California, start up Obopay has launched a pay-
                                     ments service which allows customers to make person to
                                     person fund transfers and using their hand sets to pay for
                                     purchases using a companion debit card.
                                     The system works on any web enabled mobile phone and
                                     customers can down load the m-payments application to
                                                                                                                  Earthport PLC sponsor
                                     their handsets. Users can use the system to receive money                    IAMTN Seminar.
                                     from any Obopay user and funds are deposited immedi-                         With leading industry speak-
                                     ately over the Obopay network.                                               ers the IAMTN held a confer-
                                     The Obopay launch comes just days after PayPal an-                           ence on 4th April to review EU
                                     nounced a mobile service transferring funds using SMS.                       payment legislation.
                                 4                                                Ed et prat dunt loreet vendreril eugiamet wis nostrud Newsletter
                                                                                 International Association of Money Transfer Networks tis ea facip                            Duis #0
                                                                                                                                                                              Issue:                     June 0000
                                                                                                                                                                                                          Illum 2006

                                                                              Leading world charities express concern

                                                                                                                                                                                                     Money Transfers Comment
                                                                              at the Global impact of tightening Money
International Association of Money Transfer Networks

                                                                              Transfer legislation.
                                                                                                                               T   he World Bank estimates that
                                                                                                                                   annual global remittance trans-
                                                                                                                               fers add up to approximately $150
                                                                                                                                                                         The World Bank research
                                                                                                                                                                         shows that a 10%
                                                                                                                                                                         increase in international
                                                                                                                                                                         remittances from each
                                                                                                                               billion, with the lion share going to     individual migrant will
                                                                                                                               developing countries. That is more        lead to a 3.5% decline
                                                                                                                               than the total annual government aid      in the share of people
                                                                                                                                                                         living in poverty.
                                                                                                                               to poor countries and in some cases
                                                                                                                               exceeds foreign direct investment. It
                                                                                                                                                                         In Mexico, a one per-
                                                                                                                               is believed that far larger amounts are   cent rise in the portion
                                                                                                                               being transferred unofficially.           of households receiving

                                                                                                                                                                         remittances reduces by
                                                                                                                                   s the number of economies reli-
                                                                                                                                                                         1.2 lives the number
                                                                                                                                   ant on migrant labour is growing      of children who die in
                                                                                                                               the amount of money being “sent           their first year.
                                                                                                                               home” is at an all time high, with pay-
                                                                                                                               ments providing a lifeline for people     Illiteracy among
                                                                                                                               in developing countries and remit-        children aged 6 to 14
                                                                                                                                                                         falls by three percent
                                                                                                                               tances playing an important role in       when the number of
                                                                                                                               helping world economies grow.             households receiving

                                                                                                                             espite this, many banks are                 remittances rises by one
                                                                                                                                                                         percent. and leads to a
                                                                                                                             unwilling to deal with this side of         proportionate increase
                                                                                                                        the money transfer market condemn-               in enrolment rates
                                                                                                                        ing migrant workers to the negatives             among children aged
                                                                                                                        of informal cash transactions,                   17 to 21
                                                                              costs, delays and lack of formal legal protection.

                                                                                                                                                                           Founders of the IAMTN
                                                                                 here is, of course, a need to strike a balance between legislation that
                                                                                 prevents money laundering, whilst still enabling the vital flow of money to
                                                                              developing countries.

                                                                              S   everal charities, are now beginning to challenge the latest legislation that
                                                                                  threatens to discriminate still further against both the migrant worker and
                                                                              the smaller money transfer operators who are already experiencing huge dif-
                                                                              ficulties with banks not taking on their accounts. A more holistic approach and
                                                                              an international framework is needed with a genuinely inclusive approach to
                                                                              helping poor and vulnerable economies diversify whilst complying with the
                                                                                                                                                                            Lady Olga Maitland
                                                                              standards that prevent money laundering.

                                                                              T  he key to achieving this lies in creating greater transparency across the
                                                                                 board. The hidden world of informal money transfers has to be brought to
                       International Association of Money Transfer Networks

                                                                              the fore and informal operators need to gain co-operation from banks and op-
                                                                              erate within the FSA’s regulations. Similarly, the underworld of money launder-
                                                                              ing must be unearthed by anti laundering practises that are highly effective
                                                                              yet non discriminatory.

                                                                                                                                                                           Lord Norman Lamont
                                                                                                For further information contact:
                                                                                                Lady Olga Maitland

                                                                                                International Association of Money Transfer Networks
                                                                                                6.03 Exchange Tower
                                                                                                One Harbour Exchange Square
                                                                                                E14 9GE

                                                                                                T: 020-7531-1347                                                              Gagik Zakarian

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