Being one of the world's top remittance corridors, USA-China presents an interesting case. On the one hand, it seems much less competitive vs. other top global destinations such as Mexico, India, or Philippines. Out of major money transmitters, only Western Union, MoneyGram, and Ria have been active with Xoom joining just in early February. Add to that WalMart and Wells Fargo's remit business, and we are pretty much done (check https://www.saveonsend.com/ for more details)

But such seemingly open field has not resulted in higher margins (fee + FX markup among providers). To the contrary, Western Union has maintained a virtually zero FX markup over the last 4 months and MoneyGram's was around 0.2%. In comparison, these two providers are usually charging 0.5-3.0% FX markup for other destinations. Western Union isn't pulling "transferwise" here either - its fee is fixed at only $5 for up to $2,999 bank-to-bank transfers. For USD-to-USD transfers, Ria is scaring margins away with only $5 fixed fee for up to $2,999 bank-to-bank or bank-to-cash transfers. (more analytic at https://www.saveonsend.com/)

So why charge such low margins instead of getting closer to Xoom's levels? Is this some strategic predatory play to preempt others from following in Xoom's footsteps. Well, it didn't deter Xoom and would almost definitely not stop others (I am talking about you, TransferWise and TransFast)? My guess it is because this is CHINA. Call it a magic or mystery, but there is something about that market which makes Corporate Controller to be much less stubborn when it comes to approving a break-even business case.