Remittances to Vietnam: $7 Billion a Year

Remittances to Vietnam: $7 Billion a Year

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 Financial remittances — better known as money being sent back to the home country — have dramatically changed the economic landscape of Vietnam in terms of poverty levels and development over the years.

The aftermath of the war had left Vietnam among the five poorest countries in the world, with 75 percent of the population living in poverty in 1984. With the help of financial remittances over the years, the poverty level had dramatically decreased to 37 percent in 1998 and later to 29 percent in 2002, according to the World Bank.

The support of financial remittances has had a heavy hand in the improved conditions in Vietnam, and the gradual increase in those remittances over the years has been attributed to a combination of key events, which include but are not limited to: the Vietnamese government launch of a renovation process (Đời Mới) in 1986, the U.S. lifting of the embargo against Vietnam in 1994, and Vietnam’s membership into the World Trade Organization in 2007.

In 2008, Vietnam emerged as the 10th-leading recipient of migrant remittances among developing countries with $7.2 billion received during that year alone. The U.S. neighbor to the south, Mexico, was third behind India and China with $26.3 billion total sent.

Later in 2009, Vietnam’s financial remittances fell slightly to $6.8 billion despite predictions of a greater drop among all developing countries. The slight decline during the considerable global economic downturn illustrates the resilience of money being sent to Vietnam from abroad.

As financial remittances to Vietnam have become more frequent and more substantial, there has been a simultaneous increase in demand to send money home through reliable channels from the United States. The more well-established and well-known institutions purportedly offer safer and more secure means of remitting money back to Vietnam.

What follows is a look at four options for the Vietnamese American community wanting to send money back to Vietnam.

Western Union

As the oldest of the four financial institutions and possibly the most well-known money transfer company in the world, Western Union has been in business for nearly 150 years. It started out as the New York and Mississippi Valley Print Telegraph Company sending telegrams, not money, in 1851.

The company later changed its name to Western Union in 1856 and introduced money transfers within the U.S. borders in 1871. It expanded its financial reach to Europe, Northern Africa, North and South America, Australia, and Asia in 1896 and has been adding more locations over the past century as the global economy continues to grow.

Vietnam is one of its more recent additions and is just one of more than 200 countries and territories involved with Western Union. The company boasts approximately 430,000 a-gent locations worldwide and is consequently the most globally ubiquitous of the four financial institutions.

“Our global expansion has been evolving, and Vietnam has been one of the countries where we have planted a flag there given that we do believe that there are a lot of Vietnamese people who migrate to different countries in the world and who would have a need to send money to their loved ones,” said Jenny Bragg, Western Union’s vice president of U.S.- international remittances in Asia and Africa. 

With more than 6,800 locations in Vietnam and about 46,000 locations throughout the U.S, the motto of Western Union is “money in minutes” and it literally takes a matter of minutes from the point of request in the U.S. to the point of pick-up in Vietnam.

Wells Fargo Bank

Just a year after Western Union was established, Henry Wells and William Fargo founded Wells Fargo & Co, in the gold rush port of San Francisco in 1852. The company focused its services on buying gold, selling paper bank drafts as good as gold, and rapid delivery of gold.

Today, Wells Fargo has remained one of the top banks in the United States, even during the current economic recession. According to various sources, it was No. 1 in commercial real estate lending by number of annual transactions in 2008, in bank technological innovation in 2009, as a green bank in 2009, and in “customer loyalty engagement” in 2010.

Wells Fargo is also No. 1 in the United States in the number of banking stores with 6,590 retail branches in 39 states and Washington D.C. The company recently opened a retail branch in Little Saigon in 2008 after years of effort on the part of Nam Hoang, the Orange County regional president for Wells Fargo.

Prior to opening that branch, Wells Fargo had already begun offering financial remittance services to Vietnam in 2006, after years of experience with Mexico starting in the mid 1990s. Wells Fargo now offers financial remittance services to 15 countries.

Hoang noted, “We saw a great need of Vietnamese Americans wanting to send money back home and what we saw was that they were going to other companies like the little ‘mom-and-pop’ goi tien (send money to home) shops. So we just saw a need that we wanted to help them fulfill here at Wells
Fargo rather than having them go to multiple places.”

As of June 30, the average Wells Fargo remittance transfer to Vietnam was about $1,400 a transfer, which is $900 more than its average remittance transaction o-verall.

Hoa Phat

Hoa Phat is a family-owned business that was started as a “mom-and-pop” gift shop in the early 1980s by a Vietnamese refugee couple named Hoa and Phat Nguyen. The shop later began offering money transfers to Vietnam in the mid-1990s around the time the U.S. embargo against Vietnam was lifted.

Phe Nguyen, vice president of Hoa Phat and son of the owners, talked about the expansion of their family business over the years. 
“We’ve transitioned from a gift-sending gift shop service to a money transfer. In mid- to late-90s, we became licensed by the Department of Financial Institutions and started expanding in California and then Texas and various other states.”

Today, Hoa Phat has 30 branches in the U.S. in about 10 states with large pockets of Vietnamese Americans. The company takes pride in being a licensed money transfer company, which allows them to offer peace of mind to their customers.

Hoa Phat’s website proudly notes, “With all these licenses, the bonding we carry totals to more than $2,000,000, so you can send money with comfort that the money you send through us is safe, secure and insured.”

The family has made strides in becoming a legitimate money transfer company, in comparison to its underground and informal competitors who may offer a lower fee, but not the same level of security.

Le Gởi Tiền Lẹ

Similar to Hoa Phat, Le Gởi Tiền Lẹ was established in Little Saigon in Westminster, Calif., by Vietnamese American Thuy Truong Le in 1999. However, a larger corporation, Omnex Group, Inc., bought the company five years later.

The distinct feature of Omnex Group is its focus on “ethnic flavor,” and its commitment to providing resources to help incubate family-run companies looking to grow. The website indicates four brands of money transfer — Giromex, Uno Money Transfer, Le’s and Universal — that cater to different ethnic groups with a network serving 105 countries and more than 40,000 locations worldwide.

There are 13 Le Gởi Tiền Lẹ branches and 170 agent locations in the United States and Canada, and like Hoa Phat, Le Gởi Tiền Lẹ also offers the convenience of home delivery. 

The company continues to be run by its original staff, with its founder maintaining offices in the same building and dropping in for regular visits.