From The Highest & Mightiest, To The Humblest “Unbanked”, Everybody Makes International Money Transfers!

It’s often said that “money makes the world go round”, but in today’s connected world, it may be more true to conclude that, in fact, the world makes money go round.

A Buzzfeed expose this week focused on the now famous – for all the wrong reasons – meeting at Trump Tower on June 9th 2016, between a publicist named Goldstone, a lawyer named Kaveladze, Donald Trump Jr, Jared Kushner, the now President’s son-in-law, and at least two other attendees, including the now disgraced Trump aide Paul Manafort.

The meeting is alleged to have been hastily convened owing to some information that had come to light in Russia that it was felt by some, could incriminate Hillary Clinton, in the run-up to the election. It seems, however, that the meeting was somewhat uneventful, with Don Trump Jr. allegedly telling the group, “look, we’re not in power yet, come back and see us when we’ve won.”

What is now causing a greater stir, at least if you are a Buzzfeed journalist, is the shadowy involvement of billionaire oligarch and Putin ally Aras Agalarov, and his occasional pop star son, Emin, in the talks.

Apparently, Agalarov senior, a developer of some repute favoured by Putin, wired some $19.5 million into his New York bank account 11 days after the meeting took place, and shortly after Trump’s election victory, wired around $1.2m into an account held by his son. Money was subsequently sent from the account to one of the representatives at the Trump Tower meeting, Irakly “Ike” Kaveladze, who funded a music company run by the publicist Goldstone.

The source of all these funds? Allegedly a post box in the British Virgin Islands, which, as we all know thanks to the Paradise Papers expose, is a place where billionaires sometimes keep money as a means to reduce their exposure to their domestic tax obligations.

We’ll leave it to you to decide if there is a story here – Buzzfeed certainly seems to thinks there is – or perhaps they are just miffed that 9 months of investigative work has not revealed much untoward…yet.

What’s interesting from an overseas money transfer perspective is the sheer flexibility that exists around making overseas money transfers. In the “old days”, if you wanted to move money from one country to another, you would have to physically transport it, and this was an activity fraught with danger, and not easy to disguise. That was the age of great train robbers, Wild Westerners, and wars.

It is still possible to commit financial crime in today’s world, of course, but cyberhacking is far from easy, and generally speaking, if you wish to move several billion from one country to another, with only very few people knowing, and most of them powerless to stop it, you can.

As mentioned before, we are not here to debate the merits, or otherwise, of the digitalisation of money – from the humble bank transfer, to the world of bitcoin and the blockchain – merely to point out that the technology is there, and people, from oligarchs in Russia, to film stars in Hollywood, to market traders in Delhi, to bitcoin traders in Bangkok, are using it.

Which brings us on to perhaps the most encouraging aspect of the digital finance revolution. Micro-finance. Across Africa, India, and Asia, vast numbers of people are classified as “unbanked”, which means that they have nowhere to store their money, except for under the floorboards.

But the rise of digital payments, and mobile wallets, is changing all that. The “unbanked” are rarely rich; which is why most banks have not bothered with them; but mobile technology embraces economies of scale, and recognises the entrepreneurial instincts of all human beings, even if they live 100 kilometres away from the nearest bank, and have more sheep, coffee beans, fish, or some other commodity, than notes and coins.

100, or even 10 years ago, a scenario whereby a Kenyan farmer “pings” a few shillings to a cousin in Orlando, Florida, who received the money instantly and without paying any fees, would not have been possible. Instead,  both sender and receiver would find themselves filling out endless forms, paying exorbitant fees, and waiting, for weeks, more in hope than expectation, that the money would reach its intended target.

Today, whether you are a Cambodian rice-picker who has never had a bank account, or a Russian oligarch who has access to several thousand accounts in 20 different countries, you can manage your money however you like, send it to whomever you want, and do it, for the most part, without most people knowing.

Brave new world, or dystopian nightmare?

Answers on a postcard. Actually, come to think of it, I’d prefer a WhatsApp, and feel free to send a micro-tip with it.

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