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Many people would like to be able to transfer small sums of cash - say $10 or $20. Typically these are people working low paying jobs, possibly far from home, who want to send a portion of what they make back to their families. Money transfer costs can be very high - on NPR last night a guy said that
Western Union charged him $15 to transfer $20 from Tijuana to LA.
It seems to me cash machines could be used for this purpose. Currently if I withdraw cash, it first checks my account to see if I have the cash. Imagine that I insert my card into the machine, so it knows who I am. I then put my $20 into the machine, along with $1 to pay costs. I then enter in another card number (my girlfriend in LA), an amount she may withdraw ($10) and a date range during which the withdrawal is permitted. Perhaps I enter a third number (my mom), $10, and another , longer date range.
When my girlfriend goes to withdraw the money, she also must insert $1 but can then take out the $10 as cash.
These machines could make a lot of money on serial small cross border transfers. There would be a strong paper trail, so it would be difficult to launder money this way.
wal mart
http://www.moneygra...mart__Extension.xml
[JungFrankenstein, Feb 10 2005]
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First you'd need to get debit cards into the hands of immigrant workers and others who are otherwise too poor, transient, or legally disenfranchised (or just temporarily in dire straits). It's estimated that Western Union worldwide makes somewhere around 3 billion off of those mentioned. It's like providing fifteen dollar a glass bottled water in the middle of the desert. It'd be called exploitative if it just weren't so damn profitable! I've never understood why competition in this area doesn't drive down prices. How does Western Union manage such a monopoly? |
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You and I can just send our family and (very) close friends an extra debit card and pin. But there are still rubs. A few years back I tried to send money from Savannah, Georgia to Michigan and was unable because no single bank was legally permitted to operate within such a large area of the U.S. My Savannah bank suggested I use Western Union. I was astonished. If it had been a life and death emergency, I'd have had no choice. Western Union takes advantage of such regulation, and such emergencies. If regulations have changed recently, maybe your idea could work. (I'll delete this in a bit. I just had to rant) |
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I can use my Visa card in a cash machine anywhere I go. My wife can use her card on the same account, even if we are far apart. Charging a cash fee instead of a fee to the account is not so outrageous. The new item in this idea is putting cash into the machine to be added to your account. |
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As regards putting cards in the hands of the disenfranchised, that is what phone cards already do. I envision these cash transfer cards for sale at small bodegas / check cashing places, like phone cards. |
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Thinking primarily of the disenfranchised here:
Financially, this would be a simple transaction. So simple, in fact, that it could be handled by a clerk at any retail store. They all seem to sell "gift cards" these days, so the registers and computer systems are set up to handle very similar processes. They would just need to make the gift cards rechargeable (for a transaction fee, of course) and create the cards in pairs or link differently numbered cards. The only real trick would be to get the card to the recipient in the first place. That wouldn't work for emergency situations, but neither would the proposed idea. |
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All stores seem anxious to give cash back these days when you use a debit card, so lack of cash in the till doesn't seem like it would be an issue. |
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The ubiquitous Wal-Mart would seem to be an ideal candidate to provide such a service. |
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The date range proposed in the idea would be a little squirrely to accomplish at a cash register through a cashier, so that part might not be so easy to implement. |
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Hey thanks half. Your walmart reference rung a bell from something I heard a while back - so I googled 'walmart money transfer'. (see link) |
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I wonder if their money transfer fees are on par with Western Union. |
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I read somewhere that PayPal came up against a wall of red tape when it started out offering micro-payment over the internet. In many cases there were no other reasons for blocking such 'citizen-to-citizen' transactions than the reason: "It undermines the profitability of banks and governments' revenue through fees and taxes." |
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