Payments body Voca is working with Citigroup to develop a low-cost international remittance platform for banks in the UK.
Under the agreement, Voca will be responsible for payment clearing, the primary interface with the banks as well as implementation and service desk support. Citigroup will be responsible for payments processing and distribution.
Research for the Department for International Development into remittance payments by migrant workers in the UK shows a huge and growing market. However, traditionally high transaction costs for bank transfer has so far left the field open to high street money transfer operators.
Marion King, chief executive officer of Voca, comments: "There is a huge demand for an easier, low-cost way of sending money abroad, and this service offers a great way for banks to compete in this market."
The new service is a turnkey solution designed to integrate easily with existing distribution , she says. Remittances sent will be cleared by Voca and passed on to Citigroup’s global payments network. Transactions will be converted into the chosen destination currency before being transferred as an account credit, cheque or cash payment to the beneficiary in the destination country.
It will be offered initially to over 40 countries covering an estimated 85% of UK outbound remittance flows.
Financial messaging network Swift is also exploring the development of low-cost remittance products for member banks and is currently scoping out the high level business, operational and standards requirements for a multiproduct interbank platform.