Limit to receive money from western union

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By JESSICA SILVER-GREENBERG JUNE 1, Soon, however, the companies, which are largely regulated by states, will be subject to new federal rules. Starting in February, they will have to disclose more to customers about transfer fees and currency exchange rates.

The rules, part of the Dodd-Frank financial regulation law, will also require companies to give customers up to 30 minutes after a transaction to get a full refund. But consumer advocates are raising alarms that money-transfer companies face fewer restrictions because the rules do not touch the pricing of services.

Money-transfer companies say that they offer an invaluable service for customers who might not have access to traditional banks and who would otherwise have no way of transmitting money to their families. Western Union, which dominates the money-transfer market, notes that it already discloses the amount of money being submitted, the exchange rate and the amount that the recipient will receive.

Aside from the transfer fees, Western Union and other similar services profit as they buy batches of currencies at a wholesale rate.

The money-transfer companies do not disclose the spreads they benefit from when they set exchange rates. For Javaid Tariq, a taxi driver in New York City who sends money monthly to his family in Pakistan, the exchange rate is particularly infuriating because of how much money he loses.

View all New York Times newsletters. Analysts expect the market for money transfers to grow. In the United States, this is led partly by a growth in transfers to China and India and an influx of immigrants from western and eastern Africa, said Larry Berlin, an analyst with First Analysis in Chicago.

Western Union and rival companies are poised to profit. Western Union and MoneyGram, which has nearly 4 percent of the money-transfer market, according to the Aite Group, are primarily regulated by the states in which they operate. The new rules, however, fall under the oversight of the new federal Consumer Financial Protection Bureau. The central idea behind the new regulations was that having more transparency would promote greater competition and allow immigrants to shop for better rates, said Betsy Cavendish, the executive director of Appleseed, a nonprofit organization focused on policy reform that provided public comment during the rule-making process.

But competitors have made little progress in penetrating the money-transfer market largely because Western Union has half a million locations in countries and territories, making it more difficult for others to edge in, industry consultants said. Although there was some hand-wringing in the industry during the rule-making, analysts said that disclosure requirements would not significantly dampen the revenue at Western Union.

Western Union, he added, already works to make fees clear to customers. Already there are signs that competition might be slow to materialize, banking analysts said. They pointed to a growing number of partnerships between Western Union and banks that might have competed for a slice of the business. Bancorp gives customers access to Western Union services through its online banking site.

Immigrant advocates argue that many people do not have time to shop for better rates. Some immigrants complain that while there might be multiple options to send money from the United States, there are not as many in the countries where their families live. A version of this article appears in print on June 2, , on Page B1 of the New York edition with the headline: Wiring Money, Feeling Squeezed.

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New Rules for Money Transfers, but Few Limits - The New York Times

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