What Differs MoneyGram and Western Union, and Why?
MoneyGram vs. Western Union: An Overview
There are still situations where it is vital to give or receive cash, and there are millions of people without access to a bank account or an online wallet in this day of pervasive ATMs, tap-to-pay checkout, and automated bank deposits. Tens of thousands of agents work for money-transfer companies like MoneyGram and Western Union in cities and towns all over the world because of this.
Services that send money can save your life. Stranger things have happened—and not just when you are traveling abroad. You might think it is implausible that you will ever be broke and stranded in a bus station in Bengaluru, needing your spouse to send money. What if you need to send the rent deposit right away since your child is enrolled in a Canadian university? For those without bank accounts, money-transfer businesses offer banking services such bill payment, money orders, and money transfers. Many of the consumers in the US and Canada are recent immigrants who frequently send money to family members back home. It is significantly simpler to locate a nearby MoneyGram (MGI), Western Union (WU), or both agent outside of the United States. In many countries, cash is still king, and access to banking services is still widely lacking in underdeveloped countries.
Western Union
The larger of the two businesses, Western Union, has a well-known brand name thanks to its former telegraph industry monopoly. In 2006, the company stopped selling telegrams, but by that time, it had started new businesses. Around 500,000 Western Union agents are spread throughout more than 200 nations. Customers have three options for sending money: over the phone, online through Western Union, or in person.
Fees are subject to a wide range of variables, such as the method of payment, the speed of money delivery, whether cash is used or money is sent to a bank, and the locations of the sender and the recipient. The exchange rate increases the cost's level of uncertainty for overseas transfers.
In April 2022, the fee for a $200 domestic cash-funded and cash-paid transfer was $17.50, compared to $8.99 for the identical transfer from an online bank account. There is a greater fee when sending cash using a credit card or debit card.
International transfer costs with Western Union can differ significantly. As of April 2022, for instance, a $500 transfer from the United States to Mexico funded online and received in cash in Mexican pesos was free. However, the corporation emphasizes that in addition to any fees, it also earns money from the exchange rate provided. It would have cost $8.00 to finance the identical transfer in cash at a Western Union agent. The same amount would have cost $4.99 for online bank account transfers, $6.99 for a debit card, $21.49 for a credit card, and $8 for sending cash through an agent to Ireland for pickup in euros. Fees on a $500 transfer to China ranged from $8 for cash transferred to an agency to $64.49 for international transfers.
MoneyGram
The main rival of Western Union is MoneyGram. As of April 2022, it charged $1.99 for a $200 domestic transfer funded online with a debit card and $12.50 for a $200 domestic transfer funded and received in cash.2
MoneyGram's reputation was established through international money transfers. It had more than 380,000 payment locations worldwide as of 2022.
To send $500 to Mexico funded online from a bank account as of April 2022, MoneyGram charged $3.99, $8.99 for funding with a debit card, and $9.99 for funding with cash at an agent location. The fees were $4.99 if the transfer was funded electronically from a bank account, $9.99 with a debit card, $22.29 with a credit card, and $35 in cash paid to an agent for the same transfer to Ireland for collection in euros. Only China transfers to a bank account are available through MoneyGram's online fee estimator. Fees range from $0 for transfers financed online from a bank account to $20.49 for transactions funded with a credit card.
The U.S. Consumer Financial Protection Bureau (CFPB) and the attorney general of New York filed a lawsuit against the business in April 2022 on the grounds that it unnecessarily delayed transfers, failed to train staff to settle disputes in accordance with federal law, and failed to create and document policies and procedures. MoneyGram referred to the lawsuit as "meritless" and declared that it would contest it.
Special Considerations
Sending money through these services has the disadvantage that they operate during the same hours as the stores. Your family might not be able to send you that essential cash until the next morning, so you'll have to wait it out at the bus stop.
Requests for cash transfers from strangers are frequently an indication of fraud. It is the current version of placing a wad of unmarked banknotes into an envelope and leaving it in a public location on instructions from a stranger since the receiver can't be found.
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