Kenyan government salute to remittances

The Kenyan government recognizes the contribution by close to 2.5 million Kenyans in the Diaspora towards the country's economic growth through their remittance, Vice President Kalonzo Musyoka has said.

Mr. Musyoka noted that in 2008-2009 financial year Kenyans living and working abroad remitted over $1billion to the country.

He said the government will continue to engage her citizens abroad in various fields as they were only contributors to the country's economic growth but also they are ambassadors who play a crucial role of boosting positive image internationally.

The Vice President made the remarks on Monday when he opened the first conference of Kenya's honorary consuls abroad, at the Windsor Hotel Nairobi.

The conference whose theme is "New Dimensions in Kenya's Diplomacy: the role of the Kenya's consuls is aimed at appraising the officials with the country's foreign policy priorities and their role in actualizing them.

Mr. Musyoka said the adoption of the proposed constitution will open doors for the country to expand its bilateral relations with the rest of the world for the benefit of her people.

He said the new law will allow for dual citizenship, thus creating the right environment for the Diaspora to increase its remittances and investments

On tourism and foreign investments, Mr. Musyoka added, the draft proposes the devolution of funds thus opening up the rural areas for business and development.

The Vice President said the government was in the process of producing a written foreign policy in which core priorities and objectives such as promoting economic development, enhancing regional peace and security with interlinked pillars of diplomacy will be outlined. He however, noted that due to financial and economic limitations, the government has adopted a strategy of expanding Honorary Consular representation abroad to conduct Kenya's diplomatic interests.

The Minister of Foreign Affairs (MFA) Moses Wetangula commended the honorary consuls for offering to represent Kenya abroad, citing Australia where there are many Kenyans studying and working. He assured that the government will support all the efforts by honorary consuls in their tasks as country's representatives.

Mr. Wetangula assured them that they will be introduced to the key players in the Kenya economy and the role they can play in the vision 2030.

The Dean of Honorary Consuls, Mr.Jens Peter Breitengross of Hamburg, Germany urged the ministry to keep them informed of the changes that are taking place in Kenya.

Remittances to Mexico register first increase since 2008

The amount of money sent home by Mexicans living abroad increased slightly in April for the first time in 17 months.

The Bank of Mexico says remittances for the month reached $1.8 million, less than a 1 percent increase over April 2009. The bank says no increases had been reported since November 2008. But it also noted in its report that remittances from January to April this year dropped to $6.6 million, nearly 9 percent less than the same year-ago period.

Remittances are Mexico's second-largest source of foreign income after oil exports. Nearly all of the money comes from the US, where nearly 12 million Mexicans live.

Recovery in the Gulf drives rise in remittances to Jordan

Economists expect remittances from Jordanians working abroad, mainly in the Gulf region, to continue to increase steadily this year.

According to figures recently published by the Central Bank of Jordan (CBJ), expatriate transfers during the first four months of 2010 rose by 2.4 per cent reaching JD797.7 million ($1.1 billion) compared with JD779 million during the same period last year.

Foreign remittances represent approximately 20 per cent of Jordan’s gross domestic product.

CBJ figures showed that remittances during April of this year increased by 6.7 per cent compared to the same month in 2009 from JD195 million to JD208 million.

Economist Hani Khalili said that the rise in money transfers from abroad indicates that either the number of Jordanians working in the Gulf region has increased or that workers’ income have gone up.

“I believe that the number of Jordanians working in the Gulf has increased because the economies of these countries are recovering and they tend to attract more skilled labor,” Khalili said, adding that Jordanians are among the most wanted skilled workers in the Gulf.

Fahmi Abu Dayeh, chief economist at a local bank, said that the volume of remittances is returning to its usual levels from previous years, noting that the drop in remittances in 2009 was temporary, due to repercussions of the global economic downturn.

“I expect remittances to continue growing in the coming years as higher oil prices have spurred recovery in the Gulf region,” he said.

Economist Ali Tabbalat agreed, but cautioned that “remittances are expected to rise steadily but not dramatically”.

The Gulf private sector is looking for qualified and skilled staff, and many Jordanians are heading to work in the oil-rich region, particularly in Saudi Arabia, Tabbalat added.

Economists agreed that last year analysts overestimated the effects of the global downturn when they predicted that many Jordanians working in the Gulf would be laid off.

Abu Dayeh said that lay-offs in the Gulf were primarily among Asians who often work as unskilled laborers in construction projects, whereas Jordanians work in more specialized fields such as engineering, medicine and academia.

Tabbalat said that the majority of Jordanians who left work in the Gulf were working in Dubai, as the emirate was hardest hit by the global financial crisis, agreeing that the number of those who were sacked was “very limited”.

According to official figures, over 600,000 Jordanians work abroad, mainly in the Gulf countries, of whom 260,000 work in Saudi Arabia, 250,000 in the United Arab Emirates, 42,000 in Kuwait and 27,000 in Qatar.

Remittance inflows to Kenya drop because of Euro problems

Remittances from the Kenyan diaspora will maintain a downward trend as the debt crisis spreads among European nations, market analysts have said.

“There has been a significant drop in remittances from the European area in the last few months, we don’t know when the trend will reverse,” said Frida Nzilani of Sky Forex Bureau.

Europe, which accounts for 27 per cent of the total remittances from Kenyans working abroad, is reeling under the weight of huge domestic debts.

“Investment instruments like mortgages are going to be affected due to reduction in incomes and job losses”, said Mr. Karisa Yaa, treasury manager at Kenya Commercial Bank.

An earlier report by the Central Bank had indicated a decline of three per cent, but market analysts warn the trend may dive further even as most Euro zone nations adopt austerity measures to curtail spending hence shrinking growth.

“Economies already in a crisis like Greece, Spain and Britain will see taxes hiked, an issue that will prompt layoffs and salary cuts” said Mr. Chris Muiga, a trader with Kenya Commercial Bank in an interview with the Business Daily.

“The decline of Greece into her current economic woes has sent jitters across the Euro zone creating a lull in what would have been otherwise a resurgent economic growth, ” said Karisa.

Kenya has been experiencing growth in the value of remittances from the diaspora for the last five years owing to the increasing number of skilled Kenyans abroad. They were, however, hit by the last global financial crisis, a resurgent upward trend has again come under pressure from the euro zone debt crisis.

The annual aggregate figures have maintained a steady upward trend from $338 million in 2004 to $609 million in 2009 except between 2008 and 2009 when there was a lag arising from the global financial crisis.

The decrease in remittances from $611 million in 2008 down to $609 million in 2009, a three per cent decline, arose from job losses and the liquidity crisis occasioned by the subprime mortgage crisis that hit Europe and North America.

Industry players attributed the persistent long run increase in cash inflows to the increasing number of Kenyans looking for employment abroad.

Philippine remittances rise 7% to $4.34 billion in March

Remittances grew seven percent year-on-year in the first three months of the year to $4.34 billion, the central bank (Bangko Sentral ng Pilipinas (BSP)) reported today.

For the month of March, overseas Filipinos sent home $1.55 billion, up from $1.41 billion in February. It was also 5.44 percent higher compared to March 2009 of $1.47 billion. BSP said remittances from land-based and sea-based workers increased by six percent and 11 percent, respectively.

In a statement, BSP Governor Amando M. Tetangco Jr. said prospects for more Filipinos finding more work abroad is "positive" in the next months, particularly in Hong Kong, Qatar, Taiwan, Kuwait, United Arab Emirates and Saudi Arabia.

Tetangco said employment opportunities "are expected to rise along with clearer signs of global economic recovery." He quoted a report from the Philippine Overseas Employment Administration that in the first quarter this year, job orders totaled 155,334, of which 20.2 percent or 45,393 were job orders for service, professional, technical, and production-related work.

Tetangco also attributed banks expanded remittance network in the continued expansion of fund transfer volume. As of the end of March, the BSP noted that these networks increased to 4,483 from end-2009 of 4,192. These networks include tieups, remittance centers and local banks representative offices or branches abroad.

BSP earlier increased its remittances forecast to eight percent this year, from six percent. In dollar terms, remittances are expected to amount to $18.7 billion this year from $17.3 billion at the end of 2009. The previous projection was six percent or $18.35 billion.

PayPal launches Android mobile developer library as smartphone sales surge

PayPal has opened up its Mobile Payments Library - which lets developers add checkout functionality for physical goods and services to their apps - to Android users. This follows the launch last month of an equivalent library for iPhone handsets and is intended to help developers charge for goods and services sold through applications without having to collect and store debit or credit card information.

The eBay unit has also introduced a PayPal X Toolkit for Google App Engine, a platform for developing and running Web applications and services on the search engine outfit's cloud.

Recent data from Gartner found that Android devices surpassed iPhone sales for the first time in Q1 as smartphone sales to end users reached 54.3 million units, an increase of 48.7 per cent from the first quarter of 2009.

UK mobile money operation Monitise says it has seen a similar surge in the use of m-banking smartphone apps, processing 20 million enquiries and transactions in the last six months. Earlier this year Monitise unveiled a mobile money app for Android phones, available as a free download from the 'Android Market'.

Alastair Lukies, CEO, Monitise, says: "Smartphones are completely changing the face of mobile banking. A sea change is well underway in how people manage their day-to-day finances as they realise how simple, slick and fast mobile banking is - as easy as a few taps on a keypad."

Research house Forrester recently found that European BlackBerry and iPhone users are nearly three times more likely to use mobile banking services than the owners of other handsets.

MasterCard to open up its payment system to mobile and internet payments

MasterCard has announced it is to let mobile and web developers integrate its payment technology directly into apps. The move appears to mirror the model announced by PayPal, which serves up its own payment software for programmers.

However, those behind the venture have suggested MasterCard will be willing to let third parties take even more of a hands-on approach, with the company looking to make its payments system as flexible as possible.

According to the New York Times, MasterCard's chief innovation officer, Josh Peirez, is keen to see what third parties can come up with. The idea is that those outside MasterCard will be able to utilize the technology in ways the company hasn't considered before.

"A big part of the strategy is to be able to harness the innovation of others in the developer community to really push our business forward," Peirez told the paper.

It's no surprise MasterCard is looking to open up, with the firm having previously “built” its own payment apps that relied on merchant agreements and repeated data entry - a set-up deemed unappealing by many.

MasterCard's new approach appears more open, with MasterCard Labs which is behind the project - stating 20 of its services are available for third parties to use in their applications.

The news follows a renewed bid by PayPal to make its PayPal X software the default choice for developers, with its in-app purchase system now available for Android as well as iPhone.

It would appear PayPal still has some time before MasterCard becomes a real competitor, however, with Peirez merely stating that the company aims to open up its technology “by the end of the year”.

Visa and Bancomer Transfer Services launch new money transfer system for Remittances from the US

Visa and Bancomer Transfer Services (BTS) have launched of a new money transfer service that will provide an additional alternative for consumers that send money from the United States to friends and family living abroad.

Starting this month, consumers will be able to initiate a Visa money transfer transaction at any BTS location in the United States. The Visa money transfer transaction can reach any eligible Visa account in the world, including all key remittance destination countries; however, the initial deployment of the service will enable consumers to send funds from the United States to select countries such as El Salvador, Brazil, China and The Philippines, with plans to extend the program to allow remittances from BTS locations to any country within the Visa network.

The new program offered by BTS is an enhancement to its recognized service offering that enables US consumers to safely and securely send remittances worldwide.

"The expansion of Visa money transfer to enable remittances from the US to eligible Visa accounts in Latin America is a significant milestone for Visa and our clients," said Jim McCarthy, Global Head of Product at Visa Inc. "Our alliance with BTS is a great example of how Visa is expanding its business network to bring the convenience and security of Visa digital currency to more consumers in more countries around the world."

According to the Inter-American Development Bank (IDB), the Latin America corridor is one of the largest money transfer markets in the world, with a total of USD $58.8 billion transferred in 2009. In 2009, BTS alone accounted for USD $10 billion in consumer funds transferred to Latin America, making BTS one of the largest processor of remittances for this region. Other large remittances markets served by BTS from the U.S. include Asia, Europe and Africa.

"As a member of the BBVA Group, we are always working to help people simplify their lives via sound, innovative products and services," said Moises Jaimes, President and CEO of BTS. "This goes far beyond being a complement to our traditional money transfer services. Our work with Visa strengthens our commitment to the evolution of the remittances industry, and, by providing our consumers with a wider array of safe and secure services and channels, it gets us one step further in our quest towards serving this important segment in the financial services industry."

Visa money transfers initiated at a BTS location in the U.S. are processed through Visa's secure network and will become available to Visa cardholders, who won't need to go to a physical location to receive the money. Funds can be transferred to eligible Visa debit, credit or prepaid accounts. The agreement with Visa provides BTS with access to Visa's global network and has the potential for BTS to reach more consumers in more countries.

"The Visa money transfer and BTS agreement is a serious endorsement of Visa's ability to become an alternative channel for money transfer companies and banks," said Gwenn Bezard, Research Director at Aite Group. "Money transfer companies' desire to enable remittance transfers directly into bank accounts has grown in recent years, and Visa is positioned to become the go-to utility for that service."

For the launch of this new service, Visa worked closely with BTS and Visa Debit Processing Services (DPS), to securely connect BTS' money transfer platform to VisaNet, Visa's global processing network. DPS is Visa's issuer processing service in North America that connects outside parties, such as issuing financial institutions and merchants to VisaNet.

Japan may clamp down on N. Korea remittances

Japan is mulling tougher restrictions on sending money to North Korea in response to Pyongyang's sinking of a South Korean naval ship, domestic media said on Tuesday.

But Finance Minister Naoto Kan suggested stricter sanctions might be largely symbolic. Japan already has measures in place, including a trade ban and restrictions on remitting funds.

"There's a question about how effective these measures have been, but we should consider such options to show our stance under the current circumstances," he told reporters.

Regional tensions continued to rise on Tuesday, when South Korea's Yonhap news agency said North Korean leader Kim Jong-il had ordered his military to be on a combat footing. South Korea has banned all trade, investment and visits with North Korea.

The Japanese government already requires that remittances to North Korea of more than 10 million yen ($110,800) be reported to the finance ministry, but is considering lowering this limit, the Nikkei newspaper said.

Tokyo may also tighten restrictions on travel between the two countries and ban ships that have visited North Korea from entering Japanese ports, the paper said.

Japan already bans North Korean ships from visiting Japan, among a series of measures introduced over the past few years to protest the North's nuclear and missile tests and its abduction of Japanese citizens in the 1970s and 1980s.

Problems delay use of remittance system in the Philippines

Hardware and connectivity problems would delay the use of the central bank’s electronic payments system for interbank remittance transfers to the third quarter.

“Most of the banks expect to complete their migration to the new system only by end-May or end-June 2010 while two banks have indicated that they could comply by end-September,” the Bangko Sentral ng Pilipinas (BSP) said in a statement.

By “new system,” the BSP referred to the Philippine Payments and Settlements System (PhilPaSS) Remit System.

The central bank and the Association of Bank Remittance Officers, Inc. (ABROI), Bankers Association of the Philippines, the Chamber of Thrift Banks, and the Rural Bankers Association of the Philippines had signed a memorandum of agreement in December that would allow these banking groups’ members to use PhilPaSS for interbank remittance transfers.

The remittance system -- envisioned to reduce the cost of remittance transfers to P50 per transaction from P150 to P550 at present -- should have been operational in the first quarter.

But as the BSP explained, banks were hounded by “hardware and system connectivity” problems. It did not elaborate.

It said only one bank, which the BSP did not name, was able to migrate to the PhilPaSS Remit System.

“The BSP will call a meeting with the heads of the participating banks to facilitate the use of PhilPaSS and ensure that overseas Filipino remitters will benefit from further reduction in remittance charges,” it said.

PhilPASS was established in 2002 as the central bank’s electronic payments system. It allows banks, non-bank financial institutions and those with quasi-banking licenses to have real-time settlement of their transactions.

The PhilPaSS Remit System was essentially initiated by the BSP and ABROI to eliminate the use of couriers in bank-to-bank crediting of remittances -- a mode of transfer that has proven to be expensive and risky.

At present, a Filipino working abroad will make a deposit in a bank, which then hires a courier to deliver the funds to another bank, where the Filipino worker’s relatives claim the remittance.

“PhilPaSS ensures safer, faster and cheaper means of remittance transactions,” the central bank stressed.

ABROI members number 11, including the country’s biggest banks.

Remittances grew by 7% to $4.3 billion in the first quarter. The BSP sees remittances growing by 8% this year from $17.35 billion last year.

Operations Risk - Bank settles wire transfer security suit against customer

PlainsCapital Bank in the US has settled a lawsuit it bought against one of its own business customers after crooks stole over $800,000 from the company's account. Cybercrooks stole the money from the PlainsCapital account of Texas-based Hillary Machinery last year via ACH and wire transfer.

Around $600,000 was recovered but when Hillary Machinery called on its bank to refund the remaining $200,000 it was hit with a lawsuit asking the court to affirm that security was reasonable and that the transfers were processed in good faith.

The company fought back with its own suit, arguing that the transfers, which went to Europe, should have set off red flags in the bank's fraud detection systems.

The pair have now come to a settlement in what was widely seen as an important test case following a sharp rise in account hijackings of business credentials.

Terms of the settlement have not been disclosed, but it comes just days after the courts threw out a motion by the bank to hold the hearings in private.

Recent research from Guardian Analytics and Ponemon Institute found that the US banking industry is failing to protect its small business customers from a destructive epidemic of cyberfraud that is sweeping the nation.

The research found that 55% of businesses reported experiencing fraud in the last 12 months, with 58% of fraud enabled by online banking activities. Yet, despite the soaring crime rate, 80% of banks failed to catch fraud before funds were transferred out of their institution. In 87% of fraud attacks, the bank was unable to fully recover assets.

Mobile Banking - A new product is launched in Kenya

Kenya's largest mobile operator, Safaricom, and Equity Bank, have unveiled M-Kesho, a mobile banking product targeting rural areas. M-Kesho will allow M-Pesa (Safaricom's mobile money transfer service) account holders to deposit money, withdraw cash and access loans.

"If all M-Pesa customers are banked as is envisaged with the M-Kesho product, Kenya will be the most banked country in Africa and in the developing world," said Mr. James Mwangi, Equity Bank chief executive.

The product will transform M-Pesa accounts into bank accounts, enabling M-Pesa customers to open savings accounts where they will be able to transfer as little as a Ksh.100 (US$1.3) at no cost.

Speaking during the launch in Nairobi, Kenya’s President Mwai Kibaki said M-Kesho is a landmark product that will integrate the telecommunications and banking sectors and would improve access to cost effective financial services.

Other than deposits and withdrawals, M-Kesho customers will also be able to access micro-credit and micro-insurance products, and earn interest on their money.

Mobile Banking – New text service for UK customers

MBNA Europe, a wholly owned subsidiary of Bank of America, has introduced new mobile banking text service, to enable UK customers to text for their credit card information.

By using the mobile banking text service, customers can use their mobile phone to get credit card account information, including balance, payments and transactions, by texting to a dedicated mobile short-code number.

To use the service, customers with mobile phone numbers registered to their accounts can send “Bal”, “Trans” or “Bill” to the dedicated short-code number for the latest information on their accounts.

Ian Craig, sales, service and operations executive for Bank of America Europe Card Services, which operates the MBNA brand, said: "The mobile banking text service is one of a number of exciting new improvements we will be making to our services. With this service, we are able to provide our customers with another way to bank that is simple, straightforward and puts their credit card information at their fingertips whenever they need it.”