Money transfer business creeps back to Cayman

| 27/11/2015 | 1 Comment

money-transfer-services(CNS): The return of Western Union money transfer services, which will once again offer local currency transfers, was made possible by the Cayman-based Scotiabank, which said it was willing to offer banking services to the firm’s partner, Grace Kennedy, a money transfer company it had worked with for decades, because it was comfortable with its compliance regime. Meanwhile, JN Money Services Cayman (JNMS), which had the largest share of the lucrative remittance business in the Cayman Island, is appealing to CIMA to help it secure local banking so it can return to local currency services.

During a press briefing on Wednesday announcing the return of local currency services from Western Union at Foster’s Supermarket locations through Grace Kennedy, the government said that they had been working behind the scenes to facility the partnerships. However, the problem was a commercial one and it had always needed a commercial solution.

Financial Services Minister Wayne Panton said government was doing what it could to support efforts of JNMS, which, despite the problems over the last few months, had at least offered a service sending US cash.

However, Scotiabank said it was not going to work with JNMS or its franchises. Since the compnay lost the support of Cayman National bank, no other local retail bank has been willing to partner with it. In a letter to the Cayman Islands Monetary Authority (CIMA) this week, the company asked the authority to help them with currency exchange, hoping that following a meeting Friday CIMA would help provide the solution.

Leesa Kow, Managing Director of JNMS, said the company had already requested CIMA’s support to be able to exchange CI dollars for US dollars but remained hopeful that there could be a change of position.

“We made a similar request of CIMA in August, prior to implementing US dollar-only transactions; however, they did not accommodate the request at that time. Following a deeper reading of the Cayman Islands’ laws, we have again written to them and anticipate a positive outcome,” she said ahead of the meeting.

JNMS is hoping that today’s meeting well bear fruit and allow it to resume CI dollars by Monday.

“While this solution will not solve all of JNMS’s problems, it will certainly allow persons in Cayman to benefit from the choice to remit funds to family and friends overseas,” Kow added.

If not, JNMS could lose a substantial chunk of its business with the re-emergence of Western Union.

“We continue to maintain and strengthen a very robust Anti-money Laundering/ Compliance programme, which seeks to protect our business from persons who may want to use our services for illicit practices,” Kow maintained, a critical aspect that has fuelled the problem.

It is understood that Fidelity bank and Cayman National ended their partnerships with the money transfer firms because of pressure from their US banking partners and the increasing cost of compliance for this sector, which was making the risk-reward ratio no longer commercially viable for the banks.

However, Kow said that the anticipated meeting with CIMA would benefit all players in the industry, which continues to be viewed as inherently risky in the increasingly regulated international financial markets because the very nature of the business is entirely cash based.

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Category: Finance, Financial Services

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  1. Anonymous says:

    I did not notice it had gone away.

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