The Sunshine Economy: Immigration And Moving Money With Western Union

Mar 6, 2019

Odilon Almeida was 25 when he first walked into a Western Union. He was working for Colgate Palmolive in Toronto and wanted to send money to his nephew back in Brazil for his birthday.

Almeida wasn't impressed with the experience. "I have a very big Latin name," he remembers, "and they were not used to that."

Today, Almedia runs global money transfers for Western Union from Miami. The division generates 80 percent of the company's revenues -- over $4 billion per year.

Western Union now transmits money between more than 200 countries. That global footprint and concentration on the consumer has allowed it to build its business thanks to immigration. 

"We believe in immigrants. We call them 'our heroes,'" Almeida says. "We are very pro-immigration."

The Trump Administration has made immigration a priority. The president locked into a funding battle with House Democrats in late 2018 over money for a wall on the U.S.-Mexico border leading to the longest partial government shutdown in history. This week, Homeland Security Secretary Kirstjen Nielsen testified to Congress that the administration was working with Central American countries focused on reducing what the president has referred to as "caravans of migrants" headed for the southern border. The regional compact is expected to address human smuggling.

"We see [migrants] sometimes receiving money along the way," Almeida says. "If there is anything suspect that we think is not good for people, it's not good for the country, it's not good for regulators, yes we share with (regulators)."

But Almeida says in Western Union money transfers, the company doesn't see "anything tremendously negative." He calls it business as usual, despite the heated political rhetoric regarding immigration, especially along the southern border with Mexico.

Odilon Almeida is the President of Western Union's Global Money Transfer business, which is responsible for 80 percent of the company's revenues. Almeida is based in Miami.
Credit Photo courtesy of Western Union

South Florida Remittances

South Florida exports millions of dollars every year. The money is sent to family and friends overseas. Haiti, Jamaica, and Colombia get the bulk of their official remittances from the United States. It’s money that goes toward household expenses, education or a small business.

While remittances can be an important economic force, they also have a political dimension. 

Venezuelans living abroad are now sending more money into the country than money leaving. Remittances have been targeted by the regime of President Nicolás Maduro, which requires any inbound currency to be transferred at an official exchange house -- subjecting the money to enormous inflation.

"They can stop (the humanitarian aid) trucking from entering, but not the money flow," says Almeida.

However, he acknowledges a lot of money is exchanged on the black market, fetching better currency rates than at official exchange houses, such as Western Union. It also has pushed the currency trade over the borders into Colombia and Brazil. "You see the proliferation of exchange houses at the border where you can go and change money. There are some exchange houses that are, I would say, formal and informal." 

Remittances have also been used by the U.S. to exert influence in Cuba. President George W. Bush tightened travel and money transfer rules. President Obama loosened the restrictions and President Trump has toughened the rules again. Almeida says the restrictions Trump put on remittances from the United States have not impacted fund flows to the island.  

While Cuba represents a small piece of Western Union's money transfer business, Almeida says he has visited the island each of the past three years. "It is amazing to see the development of Cuba through remittances. It's really changing Cuba."

As Venezuela's economy has cratered, squeezing cheap oil supplies to Cuba, some economists believe the Cuban economy has avoided an economic recession primarily thanks to remittances.