New Federal Fee on International Money Transfers Could Impact Virgin Islanders
Buried within the recently passed “One Big Beautiful Bill” by the U.S. House of Representatives is a new 1% federal fee on all electronic money transfers sent abroad. This fee applies to wire transfers, services like Western Union, and digital wallets such as PayPal. While the U.S. Virgin Islands is not considered “abroad” under the bill for receiving funds, the fee will apply when money is sent from the territory to another country, such as Haiti, the Philippines, or the Dominican Republic.
If the bill becomes law, individuals sending money internationally are advised to consult with their transfer service providers to understand how the fee will be applied. Notably, the bill exempts checks and cash from the fee, but relying on these methods could pose risks.
Although there is no clear data on the total amount of money remitted internationally from the Virgin Islands, the impact could be significant given the number of non-U.S. citizens living and working in the territory. Many of these individuals send money to support family members in less fortunate circumstances, and the new fee could reduce their ability to provide such support.
For businesses that facilitate these remittances, the legislation introduces new compliance requirements and paperwork. This could lead to higher fees for customers or even the discontinuation of services by providers unwilling to navigate the added complexities of the new regulations. Historically, territories like the Virgin Islands have faced challenges retaining service providers when new regulations increase operational costs.
As this legislation progresses, it remains to be seen how deeply it will affect individuals and businesses in the Virgin Islands. For now, those who send money abroad are encouraged to stay informed and prepare for potential changes.
For more updates on this and other stories, stay tuned to VI Update—your islands, your news, our reporting.
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