Digital vs. Cash, are we getting it all wrong?

This article was conceived after discussing with colleagues in the industry why the payments world has been driven into the Cash vs. Digital dichotomyThe obsessive need to pit the use of cash versus the use of digital payment means such as cards. This fictional split creates confusion as cash, cards, cryptocurrencies are just payment methods…

Preparing for IMTC ASIA 2018 in September

Last week, May 2-5, myself, Hugo Cuevas-Mohr and Olivia Chow, from Yokip Consulting, our partner in the RemTech Awards and The Blockchain Series Coordinator,  were in Manila in a round of visits with local authorities, money transfer companies, banks and associations. The main objective was to prepare the program for our coming IMTC ASIA 2018…

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THE FUTURE OF PAYMENTS: MTOs, PIs, REMTECH & THE BLOCKCHAIN

PART ONE: Cash:  Is the payments king dying? or is the king creating its own separate kingdom? Although is not exactly clear how the payments industry will evolve in the near future, we agree that 2018 is likely to be a significant year for the financial services industry: banks, eCommerce, fintechs, payment institutions and other alternative…

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What Is Driving Remittances to the Region (Latam)?

On November 15th, the Financial Services Advisor, a Newsletter published by The Interamerican Dialogue, a Washington, DC think tank where well-known remittance expert Manuel Orozco is the Director of the Migration, Remittances and Development Program, has published a Q&A entitled What Is Driving Remittances to the Region? where Manuel and several colleagues – including myself, most obliged,…

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The Antimonopoly Prosecutor in Chile sides with MSBs on Bank Account Closures

We thank our colleague Carlos Grossman, for the report out of Chile where the Antimonopoly Division of the National Economic Prosecutor Office (División Antimonopolios de la Fiscalía Nacional Económica – FNE)  reports the investigation that took place after an August 2015 complaint by a Forex Firm denouncing seven banks of denying the opening of a…

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FROM DERISKING TO DETENTE

Key positive developments in banking for MSBs It’s been a bleak period for money transmitters over the past several years. The specter of derisking —that business-killing policy of many banks in the US and globally—may be disappearing. At least in the US where other entities are stepping up. Our colleagues in other parts of the…

Blockchain-based solutions to the Caribbean derisking problem

De-risking was an acute illness for the Caribbean financial sector in 2015 and 2016. In 2017, the height of the fever has broken, but the patient is still sick. Though correspondent banks in developed countries are no longer dropping services to Caribbean banks at a rapid pace, the region’s economies remain encumbered with a residue…

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DE-RISKING: THE RISK OF NO RISK

Daniel Trías, consultant and specialist in foreign trade, banking, finance and family remittances, founder of DT Consulting and Member of the IMTC Advisory Board and who has accompanied the “Cono Sur” (southern cone) Associations in their meetings, their initiatives to find solutions to De-Risking, such as Creation of CIASEFIM, presents this Document entitled: “De-Risking: The…

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DE-RISKING AND THE GREAT UNBANKING CHALLENGE

How De-Risking is changing the face of Financial Services worldwide In July 6th & 8th the Economist published two articles that, again, raised the de-risking threat discussion to new levels. The July 6th article was entitled “The great unbanking [1] –  Swingeing fines have made banks too risk-averse – It is time to rethink anti-money-laundering…

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Family Remittances and “de-risking”: The Case of Mexico

Mexican migrants in the USA are first class Mexicans. They are in general the risk-taker population, hardworking, with a different work ethic compared to the average American worker. They give a different value to their labor and the remuneration that they receive for that effort. Some are prosperous entrepreneurs too. Success stories abound throughout the…

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IMTC LATAM 2017 Afterthoughts

Never before in an IMTC Conference we have had so many representatives from such a large number of sectors of society: politicians, ex-politicians, researchers, academics, pollsters, migration specialists, opinion makers, journalists, social workers, representatives of NGOs, cooperatives, “Cajas” (community banks), workers’ banks, entrepreneurs, remittance companies directives and commercial bank executives. I think that three factors…

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The Taxing of Remittances in the US

Update – February 16, 2018 ; New Bill in Oklahoma and Nebraska – Contributed by the MSBA Georgia & Iowa move to leverage a tax on remittances – Financial Institutions are reacting In a previous blog (in Spanish), posted in the midst of the many reporter calls, especially from Latinamerica (driven by the anxiety over the…

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The shifting views on family remittances

After a series of media interviews a couple of weeks ago, in a trip to Guatemala, I realized in a moment that I was witnessing a change in the public perception of remittances that I had not grasped before. Answering one by one journalist questions, it was unquestionable that I was witnessing a shift that I had not noticed before. After thinking about it, I could say that the shift is global although that doesn’t mean that a shift is happening in the same way or at the same time in every region or country in the world. Having been a part of the remittance industry for three decades I suddenly saw it very clearly. But I don’t want to get ahead of myself so let’s back up a little.

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Las amenazas de Trump – Remesas, impuestos, migración, deportaciones y la construcción del muro

Remesas, impuestos, migración, deportaciones y la construcción del muro

Durante las primarias presidenciales republicanas del año pasado, Donald Trump expuso su propuesta de cómo forzar a México a pagar por el muro de 1,000 millas en la frontera entre Estados Unidos y este país. Los periodistas Bob Woodward y Robert Costa del Washington Post publicaron en Abril 5 de 2016 la noticia (http://wapo.st/2jbWHFn) en la cual Trump manifestaba su intención de amenazar a México con “cortar el suministro de remesas”. Trump envió en esta ocasión un memorando de dos páginas…

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CIASEFIM-INTERNATIONAL COMMISSION OF MONEY TRANSFER ASSOCIATIONS

On December 12 in São Paulo, Brazil at the 2nd ABRACAM COMPLIANCE DAY an International Commission of Associations of Money Transfers Companies, Non-Bank Financial Services Companies, Foreign Exchange Firms and their Agents, was formed to make a public statement, signed by all the Associations, voicing their extreme concern regarding the negative impacts of “DE-RISKING” in the economic, financial e social areas of several countries in the region. They had met previously in November 11th, as part of IMTC WORLD 2016DE-RISKING & BANK DISCONTINUANCE FORUM” that discussed the impact of this practice in the Money Transfer, Remittance and Payment Industry. The termination of correspondent accounts of foreign financial institutions (FFIs) by US Commercial Banks as well as some these US Banks forcing local bank account closures by their corresponding banks in many countries in the region was also discussed at IMTC WORLD in an afternoon round table on Nov. 10, moderated by Daniel Trias.

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Recent News about De-Risking, Financial Exclusion and Bank Discontinuance

On November 11th, as part of IMTC WORLD 2016 we will be having a “DE-RISKING & BANK DISCONTINUANCE FORUM” to discuss the impact of this practice in the Money Transfer, Remittance and Payment Industry as well as the U.S. depository institutions termination of correspondent accounts of foreign financial institutions (FFIs) as well as some US Banks forcing local bank account closures by their corresponding banks in many countries in the world.

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Commonwealth’s De-Risking Meeting in London

As we informed all our special Friday Newsletter to subscribers in the UK, the Commonwealth Secretariat invited the International Money Transfer & Payments Industry to the “Disconnecting from Global Finance: A Conversation on De-Risking” meeting that was programmed this past Thursday, August 10th at Marlborough House in London. The meeting was called following the release of the Commonwealth’s report “Disconnecting from Global Finance: The Impact of AML/CFT Regulations in Commonwealth Developing Countries”. Passions ran high at the meeting as money transfer businesses and smaller financial institutions complained about the “detrimental” decline in international banking for many businesses and individuals.

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The Money Services Banking Crisis

To show how critical MSBs are to the functioning of the U.S. financial system, a 2013 Federal Deposit Insurance Corp. survey found 9.6 million U.S. households did not have bank accounts and 24.8 million households — 20 percent of the U.S. population — were underbanked, meaning they had bank accounts but also used alternative financial services outside of the banking system

Today, MSBs worldwide are caught in a banking crisis showing no signs of relenting. Based on real and imagined enforcement risks, most banks have categorically decided against providing accounts to MSBs, while others have been ordered by regulators to stop serving MSBs. This process of “de-risking,” by which banks terminate relationships with “high-risk” customers, has been brutal for the MSB industry and resulted in unforeseen consequences, including:

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The US CSBS & the MTRA Report on the State of MSBs Regulation & Supervision

The Conference of State Bank Supervisors (CSBS) and the Money Transmitter Regulators Association (MTRA) released an important report on the state of the industry that is a must read for anyone in the industry and a report that all US Money Transmitters should be sending to their banks. The report is entitled “The state of state money services businesses regulation & supervision” and it examines the non-bank financial sector in the US and the bank discontinuance and de-risking challenges the industry faces. But the main objective is to let the banks know of the strict regulations and close supervision the state regulators have on all licensed MSBs.

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Our industry, our image, our trade groups…

As I leave Barcelona after IMTC EMEA 2016 this past May 18-20 and I reflect on the industry, I can’t help but feel proud of the work we do at IMTC and the people we serve. Even talking with long-time industry warriors who are tired of the increasing complexity of the sector, I am a positive person and I can’t help but look back on where we started, around 30-35 years ago, and where we are now. Yes, we face many problems: bank discontinuance, regulatory inconsistency, a somewhat tainted image, weak trade groups, just to name a few. But we are a strong and growing sector with new products and services, new client sectors and technology developments that are impressive. Let’s take a partial look at ourselves…

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The Best Bank De-Risking Metaphor

In the past IMTC BRASIL 2016 in Sao Paulo, Leonardo Costa made a presentation available in our Download Section entitled Nueva Guia GAFI Prestadores Servicios Transferencia Dinero Valores about the FATF – GAFI February 2016 document on the GUIDANCE FOR A RISK-BASED APPROACH for MONEY OR VALUE TRANSFER SERVICES. The Guidance in Page 46 (#125) urges the Banks to “not resort…

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MONEY TRANSFER COMPANIES WIN A MATCH AGAINST BANKS IN BRUSSELS

The Spanish Courts petitioned the European Tribunal for a guidance to clarify Bank Account Closure Cases and the presumption of remittances being high risk

Our IMTC speaker and colleague Antonio Selas from the firm Cremades & Calvo Sotelo in Madrid has been preventing Banks from closing bank accounts of MTOs in Spain by taking to court the banks and convincing judges that Banks are discriminating against their competitors and that their “remittances are high risk” argument has no factual evidence. We met Antonio Selas in IMTC EMEA 2015 in Istanbul and he came to Miami and made a presentation in IMTC WORLD 2015 entitled “Bank Account Closures Are Against the Law“.

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FATF-GAFI GUIDANCE – A Risk-Based Approach for Money or Value Transfer Services

The timing could not have been better. FATF just published – February 2016, a report that all Compliance Officers of this industry must read, entitled Guidance for a Risk-Based Approach for Money or Value Transfer Services (SummaryFull Report (69 pages). I want to highlight three statements in the presentation of the report:

  • The risk-based approach, the cornerstone of the FATF Standards, requires that measures to combat ML/TF are commensurate with the risks. Such measures should not necessarily result into the categorization of all MVTS providers as inherently high-risk.
  • The overall risks and threats are influenced by the extent and quality of regulatory and supervisory framework, as well as the implementation of risk-based controls and mitigating measures by each MVTS provider.
  • While this Guidance is applicable to the entire MTVS sector (both banking and non-banking institutions offering MVTS); it is primarily intended for non-banking MVTS providers.
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The new MONEY SERVICE BUSINESS ASSOCIATION – MSBA – is announced in the US

The organizing committee, in its first public announcement, stated: “The MSBA is a trade association focused on the non-bank money services industry, including licensed money transmitters and their agents/authorized delegates, payment card issuers and distributors, payment processors, international remittance companies, bill payment companies, mobile payment application providers, payment aggregators, virtual currency exchanges and administrators, eWallet providers…

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MTRA – The Money Transmitters Regulators Association

The Money Transmitters Regulators Association will hold its 25th Annual Conference in October 6-9 in Kansas City Missouri. This conference is mainly attended by regulators from all the states that license Non-Bank Financial Institutions that are required to obtain a license to offer their services to customers in their state. The Money transmitter industry is also present…

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