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Poised to penetrate market with “lower” service fees
19 August, 2007
Global Financial Exchange Holdings LLC, a US-based Ethiopian American company, will late this month start providing online money transfer services to Ethiopia from abroad, company Chief Operating Officer (COO) Dr. Munir H. Idriss told The Reporter.
The company will be operating from the US, Pennsylvania, where it was incorporated and secured license for its online remittance transfer operation after a two-year process. It has also opened a support office in Ethiopia.
Destined to become the first online money transfer service built by Ethiopians in the county, the company will be rendering its service exclusively for Ethiopians, according to Dr. Munir.
The company will be providing its service under a trade mark BirrituExpress.com, where potential customers will “simply” click into and fill an online registration form to send money abroad.
The COO said that the company would introduce “lower” service fees compared to what such existing western and traditional outlets in the country charge (for similar services they render), in a bid to penetrate the market.
“Typical transactions via BirrituExpress.com will cost much less than the western and traditional competitors in Ethiopia,” Dr. Munir said. According to him, the company will, for instance, charge USD 8.29 for transferring a USD100 while its transfer fee for sending a USD 500 will be USD 10.29. The COO, however, noted that the company may in the future adjust the amount of service fees it charges based on the need to. “We may, in accordance to the market and in considering the capacity of our customers, adjust our service fees. But the fees will always remain better and competitive ones. We will also transfer funds computing against the best exchange rate, thereby increasing the benefit to the recipient.”
If money transferring outlets in the country provide inexpensive service, it would be possible to significantly raise the amount of remittance officially transfer to Ethiopia, according to Dr. Munir. “Currently it is estimated that over USD 375 million is being officially transferred on average on annual basis to Ethiopia, but, according to some estimates, that figure could reach up to USD two billion if remittance transferring outlets existing the country were not that expensive.”
The company has currently established links with the Oromia Cooperative Bank and the Ethiopia Postal Service, through whose branches its service will be delivered. BirrituExpress will initially deliver online money transfer service in 17 branches of Oromia Cooperative Bank and 70 branches of the Ethiopian Postal Service branches, according to Dr. Munir.
The company is also holding talks with other banks operating in the country to expand the reaches of its service in Ethiopia.
Presently, the company will provide its service to the Ethiopian diaspora residing in the US, Canada and London, who want to send money to relatives and friends in Ethiopia, and India as well. “A lot of Ethiopian students are residing in India to upgrade their educational status and many other are going and staying in that country for medical treatment and related purposes. This led us to consider India as a potential market where our service would be needed,” Dr. Munir said.
The COO said that BirrituExpress would in the near future also expand its service to the Ethiopian community in Saudi Arabia and Germany.
Initially, the company will provide an online money transfer service that employs only electronic (credit/debit) cards. In the near future it will also start cash transferring service, according to Dr. Munir.
The COO also said “Our service is timely as it will start before the millennium sets in, while the money transfer services we render employ the latest security technology.”
BirrituExpress.com remittances are processed in adherence to the US regulatory compliance requirements – US Patriot Act, Anti-Money Laundering, Bank Secrecy Act, and the likes, as well as the laws of Ethiopia and regulations of the National Bank of Ethiopia, according to the COO.
Currently about half a dozen western and traditional money transfer service providers are operating in Ethiopia, the major ones being Western Union, Money Gram and Atlantic Money Transfer.
The founders of the latest remittance transfer company had also earlier on opened a higher clinic, named Saint Yared Higher Clinic, in Addis Ababa, with plan to provide health care services for Ethiopians living in the country with funds sent from the Diaspora. With a USD 25 a month, a sender can cover health care services provided by the clinic for relatives or friends living in Ethiopia, according to Dr. Munir.
By Hayal Alemayehu - Ethiopian Reporter