Trump’s Threats to Cross-Border Payments: What It Means for Your Business

It’s been a short while since Trump stormed back into office, and he’s already shaken things up with his hard-hitting policies—and, as always, he’s not one to shy away from bold and upfront decisions. But with every action comes a ripple effect, and in the world of cross-border payments, those ripples are turning into shockwaves. From proposed remittance taxes to intensified compliance risks, Trump’s latest moves are shaking up how money flows in and out of America.

So, what does this mean for businesses, migrants, and economies relying on these payments? Let’s find out.

Will Deportations of Migrants Impact Remittances? Here’s What the Data Says

Mexicans, a huge diaspora, and one of the major remittances senders in the US, but we may see stricter immigration policies putting this financial lifeline at risk. The “Remain in Mexico” program has already led to nearly 11,000 migrants being sent back, potentially reducing the number of workers in the U.S. and, with them, the flow of cross-border payments. Since Trump’s arrival, 23,000 arrests have been made and 18,000 deportations, whilst it has risen significantly compared to the Biden administration it still remains lower than the peak levels seen during the early crackdown of Trump’s first term.

So, what does this tell us? When Trump first took office, deportations surged as part of his hardline immigration stance. But over time, the wave slowed down. Now, despite his promise to deport 11 million people, the sheer complexity of the process appears to make that goal unlikely. In fact, this could even open a window for some undocumented migrants to secure legal status. But let’s say, hypothetically, mass deportations would happen—would remittances take a massive hit? Not necessarily. Many undocumented migrants are low-value remitters, meaning their contributions wouldn’t cause a drastic drop. What would shake remittance flows, though, is something much bigger: a tax on remittances.

Will a Remittance Tax on US-Latin America Transfers Disrupt the Market?

The proposed 10% remittance tax from the US to Latin American regions is an effort to minimise illegal immigration but can cause a significant dent on transactions, impacting money transfer operators, banks, and other players in the payments ecosystem by reducing revenue and lowering demand in certain corridors.

For countries like Mexico, El Salvador, and Haiti—where remittances inject nearly $150 billion annually, this could be a devastating blow. Families who depend on these funds risk losing critical income, putting entire economies under strain.

If implemented, Money Service Businesses (MSBs) may have no choice but to raise fees, potentially driving customers toward alternative solutions like digital wallets and crypto. Interestingly, Trump seems to support crypto, so could this be the turning point that finally makes it more secure and mainstream?

Trump and Stablecoins: A Game-Changer for Cross-Border Payments?

There’s hope on the horizon—Trump’s pro-stablecoin stance could be the catalyst to reshape cross-border payments. While Trump has halted any action to progress America’s CBDC, he’s taken more steps to advance the crypto movement. In a tweet, he unveiled the U.S. Crypto Strategic Reserve, which will include XRP, SOL, and ADA, with Bitcoin (BTC), Ethereum (ETH), and other key cryptocurrencies that will be added to “the heart of the Reserve.” Since the announcement, the value of the first three coins surged by 62%, while BTC and ETH have climbed up by 10%. This momentum is pushing forward Trump’s goal of making the U.S. the “crypto capital of the world.”

Two posts by Donald Trump on Sunday, March 3, 2025, on his Truth Social account.

So, what does this mean for remittances? Stablecoins offer faster, cheaper, and more accessibility, eliminating high fees and long processing times, making this a more attractive alternative to existing transfer methods to senders.

Of course, regulation follows. Trump’s administration has called for a federal regulatory framework for digital assets to bring clarity. If well executed, this could boost financial inclusion and drive crypto adoption, but if it becomes too strict, it can do the opposite, where it stifles innovation and progression.

Crypto in Crisis: What’s shaking the market?

The cryptocurrency market took a plunge over the weekend, and while crypto is no stranger to volatility, this time the drop wasn’t just about digital assets—it was about politics, economics, and the shifting global financial landscape.

A major trigger was the Trump administration’s new tariff hikes on imports from Mexico and Canada, which sent investors retreating from risky assets like Bitcoin, creating a domino effect across the sector. Then there was the regulatory uncertainty. The U.S. government’s new restrictions on crypto exchanges and stablecoins fuelled distrust, prompting even more selloffs. On top of that, fresh inflation data and Trump’s aggressive trade policies led to a reassessment of potential Federal Reserve interest rate cuts, putting even more pressure on risky assets like crypto.

Ironically, part of the turmoil can be traced back to Trump’s own cryptocurrency summit on March 7. The announcement of a strategic bitcoin reserve—a government-controlled stash of digital assets initially caused Bitcoin’s price to drop by 6%. While the move signalled greater government involvement in crypto, it left many investors questioning what that would actually mean in practice. The market’s uncertainty around this policy likely contributed to the larger crash that followed.

Stricter Compliance: A Roadblock for Remittances?

The designation of cartels as terrorist organisations, combined with tighter immigration policies, is set to intensify compliance pressures on MSBs. They must now exercise even greater due diligence to avoid any unintended links to sanctioned groups.

For migrants, this means longer wait times, extra fees, and fewer options to send money home. If traditional corridors start shutting down, people will have no choice but to look elsewhere, whether that’s the age-old hawala system or the rising use of crypto and stablecoins, a shift that could play right into Trump’s pro-digital currency agenda.

Whereas for giants like Western Union and MoneyGram, who move billions to Latin America, the stakes are high. Stricter AML (Anti-Money Laundering) and KYC (Know Your Customer) regulations will be unavoidable, but for some financial institutions, the risk might be too much. We’ve seen this play out before where banks pulled out of Somalia’s remittance corridors when terrorist groups gained traction, leaving thousands stranded without access to funds. Could Latin America perhaps face the same fate?

Keeping up with ever-changing regulations is more than just a headache—it’s a matter of survival. A single compliance slip-up can trigger heavy fines or, worse, force a business to shut its doors entirely. Yet, many companies still juggle multiple software tools, manually stitching together fragmented systems to stay compliant.

This approach isn’t just inefficient; it’s risky. When regulations shift overnight, you need a solution that evolves with them. That’s why we built an all-in-one platform with compliance at its core. Unlike other providers, we continuously adapt to market trends and regulatory changes, ensuring you aren’t left scrambling when new rules emerge.

Take our Liveness feature for example. With biometric-powered selfie checks, remitters can instantly confirm their identity—cutting fraud risks while keeping regulators satisfied. Plus, through our platform, regulators and central banks can track all inbound and outbound transactions, ensuring total transparency.

It’s this kind of innovation that makes compliance less of a burden and more of a competitive advantage.

So if you want to streamline your operations and power your growth, book a free demo with us and let’s discover how.

Bank of Ceylon (UK) Limited and RemitONE Join Forces to Revolutionise UK-Sri Lanka Cross-Border Payments

September 2024: Bank of Ceylon (UK) Limited, a fully owned subsidiary of Bank of Ceylon Sri Lanka has prudently partnered with RemitONE, a global leader in cross-border payment technology solutions. This strategic alliance is expected to significantly improve Bank of Ceylon’s competitiveness in the UK-Sri Lanka corridor, heralding a new era in their 80-year history. The collaboration marks a pivotal moment in the bank’s ongoing efforts to digitalise its services and meet the evolving needs of its international customer base. The collaboration is particularly momentous as the bank approaches its 75th anniversary on 1st October 2024, marking a significant milestone in its longstanding legacy.

The partnership addresses Bank of Ceylon’s pressing need for an enhanced online presence and expanded customer reach. By adopting RemitONE’s cross-border payment software, the bank is set to advance its technological capabilities and offer a more streamlined, user-friendly service to its loyal customers.

For RemitONE, this collaboration represents a strategic expansion into the South Asian market, reinforcing its position as an innovator in cross-border payment solutions. The partnership underscores both entities’ commitment to embracing digital transformation in the rapidly evolving financial services sector and helping facilitate money transfers for customers at affordable rates.

As international cross-border payments continue to play a crucial role in Sri Lanka’s economy, this partnership is set to deliver substantial benefits to both individual customers and the broader financial ecosystem. Soon, Bank of Ceylon customers can look forward to a more accessible, secure, and seamless money transfer experience.

About RemitONE

RemitONE is the leading provider of money transfer software solutions for banks, telcos, and money transfer operators (MTOs) worldwide. Organisations of all sizes use the RemitONE platforms to run their money transfer operations with ease and efficiency by reaching out to their customers via multiple channels including agent, online and mobile.

For more information on RemitONE, please email sales@remitone.com.

Innovation in Payments and Remittances (IPR) Global 2022 – Brought to you by RemitONE

RemitONE was pleased to bring to our great industry the Innovation in Payments and Remittances (IPR) Global event at The Westin Hotel, London, UK, that took place from Wednesday 19 to Thursday 20 October 2022.

IPR Global is the ultimate hybrid event for those passionate about transforming the money transfer industry. The event brings together global industry stakeholders, visionaries and business leaders to make informed decisions and drive positive change in the industry.

The IPR Global event featured 30 prominent industry speakers, including leading experts from Al Fardan Exchange, JMMB Money Transfer, Moneygram, RemitONE and many others from the money transfer supply chain.

Over 1000 online and 100 in-person attendees took part in the expert panel sessions, training courses and networking breaks at The Westin Hotel and on the dedicated online platform.

Watch all the panel sessions on-demand here.

The Growing Money Transfer Industry: Unlocking new revenue streams and seizing opportunities

Partnerships and Interoperability in the Payments Ecosystem

Mobile Money and the Utilisation of Super Apps

IPR Course: RegTech for Compliance in the Money Transfer Industry

Building Operational Resilience in a Digital Industry: Security, KYC and Compliance

Saving the Crucial Role of Agents and Banks in the Remittance Industry

Does Blockchain have a Future in Payments and Remittances?

IPR Course: The Ultimate Guide for Start-Ups

What next?

To discuss any of the panel sessions or to get more information on how RemitONE can support your Money Service Business, get in touch with the team at sales@remitone.com

Video: New Tech in an Old Business – The new products redefining the best in class.

Continuing our recent discussions exploring some of the challenges and opportunities being faced by the remittance sector in these uncertain times, RemitONE hosted a webinar on the 23rd of June 2021 regarding the new products that are currently redefining best in class practices and the technology that drives them. The panel was made up of experts from both RemitONE and our friends and partners in other global companies. In case you missed the webinar, here is a summary of the key insights.

Webinar moderator:

Oussama Kseibati, Head of Services at RemitONE

Panellists:

Walter D’Cruz, Director at Moneo Solutions and CEO at Livil Ltd
Stone Atwine, Founder at CEO at Eversend
Nelson Irizarry, Co-Founder and Chief Operating Officer at Paykii

What new technological advancements are now being utilised in the traditional remittance industry?

Walter: I was really looking forward to answering this one because I believe a lot of technological advancement is being driven by external forces like the regulators, banking partners and the market. For me, it’s about who adopts the technology faster and the technology I’m talking about specifically is regulatory technology like ID verification, KYC transaction monitoring, open banking, instant payments, digital payments, digital banking, artificial intelligence and, of course, blockchain. For me, those are the main drivers. The challenges companies are facing, however, largely stem from the ever-evolving beast that is compliance and the costs associated with it. A lot of fin-techs out there are reducing that cost whilst providing excellent services and as we move through this new environment, traditional remittance companies are going to have to play a big game of catch-up.

We know that regulation and fraud are the biggest challenges in the industry. What new tech is out there to overcome these challenges?

Stone: Regulation is a big pain, especially for those of us trying to upgrade across multiple countries on the African continent. Being a new-age player, we tried to do everything electronically and what we’ve seen in the software we use for everything from onboarding and compliance to KYC and anti-money laundering is that there are some major advantages the traditional players might not have noticed. For example, it helps us with integration and analytics so you can figure out if you’ve got 30 thousand or 50 thousand customers and how many of those customers did KYCs. In terms of fraud, we’re seeing many interesting solutions too. We’ve built a tonne of fields internally in Eversend alongside a new technology that allows you to spot potential fraudsters from their email address, phone number or even the gadget they’re using across different applications. I think the thing that really changes the game though is the ability to do all the required KYC diligence remotely without actually being close to the customer. We’ve seen improvements in liveness checks, for example, so that when somebody signs up on their telephone you can take a short video selfie and the technology now can figure out if this person is who they say they are.

Oussama: It’s also about customer experience; the better we have these solutions in place, the quicker it is for you to onboard someone not needing to be there. So they are on their mobile phone and take their picture and all the checks are done instantly so you can onboard them right there and then.

What have traditional remittance companies had to do differently as a result of this new technology?

Walter: You can’t replace a physical asset like cash; you have to go through to the digital world which offers a simple way of banking and topping it up with cash. Look at some of the challenger banks like OneZone where you can top up to £300 or £500 a month in cash. You go to a top-up agent, put your money in and it’s in your account within minutes. The cash economy is working right now still because there are older generations looking at crypto and digital currencies right now the way generations before looked at credit cards – with nothing but disbelief and trepidation. But there will come a time when cards are replaced by instant payment and there needs to be a roadmap in place to help these customers understand the new normal.

How do you see the utility bills payment sector in relationship with the MSB space, post-pandemic?

Nelson: Everyone has bills to pay. You’re talking about 40 billion payments a year based on households around the world and that’s just looking at basic utility services. Anywhere between 20% to 30% of funds that are being sent by remittance are being used specifically for bill payment services. I think the question we have to ask is who’s going to pay for it? Is it the sender or the recipient? From PayKii’s perspective, we actually play both sides of it. Our platform is a global digital platform with one API integration and we offer both domestic and cross border services in over 30 countries. But cross border bill payment is really our bread and butter. Because people want the ability to pay bills directly back home, either for control, security or peace of mind. There are three key challenges with bill paying in a cross-border context. The first one is awareness as most individuals do not know they can pay bills back in their home countries for themselves or for their loved ones. The second is commitment, which involves getting them to understand what is the value or bill payment by creating a more holistic view of managing the customer. The third challenge is regulatory fees but it’s slightly different from the regulatory challenge you’ll face in the money transfer world due to how different countries regulate bill payments.

Do you consider that the new adoption of technologies like blockchain may play a major role in both regions or are they typically regional focused?

Walter: I think they are going to be very regionally focused. If you look at Africa, there are certain countries where there’s been significant adoption of crypto often relating to their existing currency. In Nigeria, for example, example, there’s been 80% adoption. So it’s not about boiling the ocean here we have to really focus on corridors and where there’s a supporting regulatory framework. As far as blockchain is concerned, I think blockchain means so many different things to so many people and it’s often misinterpreted or misrepresented. For me the application of blockchain is not just about the value of an asset or funds; it is a complete 3D picture that you can build around a transaction.

Do you think that Cryptocurrencies can be a solution to solve settlement problems for intra-Africa cross-border remittances?

Stone: At Eversend we’re already using stable coins to move value across different studios based in different African countries. You really need to move values pretty quickly, especially if you aren’t going to have tens of millions tucked away in capital across different markets. We’re doing this internally though, so the customer doesn’t actually see anything to do with crypto or stable coins but we use them amongst ourselves to make sure that everything balances out in different countries. For these solutions to work we need modern systems as with old systems you’d have to use US transfer, which would take 3 to 5 days. That means we can reduce the amount of capital we need just by using this almost instant system of stable coins. I see the future of remittances going into stable coins, at least in the short term.

Customer loyalty can be a challenge in the remittance space. What new products and technologies should MSB’s consider to strengthen their relationship with the end-user?

Nelson: I’m not an expert in remittance space and I certainly can’t predict the future but what I will say is that where before you tended to have a lot of companies that were specifically focused on remittance, over the past few years fintechs have broadened everyone’s horizons. They have forced everyone to look at remittances in a slightly different way. So, the question is, what can dedicated remittance companies do to retain customers when the dynamics of the industry have changed so much and so rapidly? I think the first thing is to look at the customer holistically and ask how you can best manage that person’s financial health. Beyond helping them send money home, what else of value can you provide to help them manage their financial health?

Stone: We’re doing a lot of things internally around retention and one of those things comes back to little everyday payments. The idea is that to keep people coming back you give them the ability to quickly buy something like phone credit and bundle that in with a lot of other relevant financial services, giving them more value and more reason to stay. We also have a measure we call the “care factor” and this is essentially a measurement of the virility of our app through people telling their friends about Eversend. We try to ensure that every user is going to lead us to at least one other new user and this is done with the incentive of referral rewards so the inviter and the invitee both get a small amount of money when the invited person becomes a paying customer. We’re essentially giving our marketing budget directly to our consumers and it seems to be working.

We also know that bank de-risking is a major challenge for many businesses. What technological innovations exist to overcome this challenge?

Walter: You can’t really overcome the challenge of having a physical connection to a bank. No tech can achieve that. However, regulatory technology can de-risk your relationship with the bank by staying ahead of the game. Unfortunately, you’re never going to avoid de-risking until money businesses fully get behind PSD2, which for some reason they still seem quite reluctant to do. All you can really do is manage your volumes and cultivate banking relationships specific to the vertical markets you are going to operate in. Because certain banks will have the systems in place to focus on a certain corridor, whereas other general banks may not. The major challenge for banks is that they are typically rendered moribund by legacy systems – old IBM apps that they developed in the 70’s and 80’s that are still running some of their core business applications. So for them to adopt newer technology is very difficult because it doesn’t fit into their workflow. That’s where fintechs comes into the equation because we know what we’re doing with new technology. The problem, however, is that fintechs lack the trust of established banks and this is something that’s going to require greater collaboration. Until that happens, de-risking is just going to be a matter of doubling up, or tripling up, or spending a lot more effort in managing your relationships. But certainly being ahead of the game in terms of compliance and KYC gives you a big advantage.

We have seen the rise of everything from blockchain to instant payments and mobile money in recent years. But what changes are we going to experience in the next five or ten years?

Stone: What I see as the future of remittances and finance as a whole is some kind of central location from which somebody can get all of their financial service needs met. So if you’re sitting in a cafe in Paris and have to pay your grandmother’s electricity bill in Uganda, the platform that you use should be the same platform from which you pay your Amazon or Netflix bill. What we are seeing is that amalgamation of financial services I think that’s really going to be the future – all in one, borderless apps. You want to be able to offer more than just remittances, you want an app somebody can use to trade stocks and crypto and send money back home. The more touchpoints, the better!

Do you think the current regulatory frameworks welcome or stifle new technological innovations in the industry?

Nelson: Part of the issue is that regulators have bigger fish to fry and they rarely make the rules of the game clear, so to speak. So it poses a challenge for us depending on where the client is located and operating. Bill paying is a small ticket item that I think most regulators just haven’t thought about, which leaves us specifically in a rare position where we can move ahead but we have to do so cautiously as we can never be 100% sure if or when the regulators will suddenly decide we’re a concern. When you want to make sure you are crossing your t’s and dotting your i’s, it’s hard when that’s not the primary focus of the regulators themselves. But I guess that allows wiggle room for playing around, testing boundaries and seeing what works. And as always, working with consultants who are very good in the remittance space can make sure you understand the stadium that you’re playing in, if not the game itself.

Walter: It honestly depends on where you are as there’s no such thing as consistency. You’ve all no doubt seen the recent events in China and the impact that has had on the price of crypto. The biggest impact on the market in terms of innovation is going to be the introduction of central bank digital currencies because in a way that’s going to really legitimise their use. Then of course you have open banking, which is definitely going to happen on a wider scale. I think the advent of digital currencies will push open banking. They go hand in hand, after all.

What next?

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Tap into our experts and schedule a free consultation.

Video: Trust vs Innovation – Finding the regulatory balance for a stronger Money Transfer sector

Continuing our recent discussions exploring some of the challenges and opportunities being faced by the remittance sector in these uncertain times, RemitONE hosted a webinar on the 24th of June 2021 regarding trust vs innovation in the money transfer sector and finding a strong regulatory balance. The panel was made up of experts from both RemitONE and our friends and partners in other global companies. In case you missed the webinar, here is a summary of the key insights.

Webinar moderator:

Aamer Abedi, CMO, RemitONE

Panellists:

Ibrahim Muhammad, Payments Consultant, RemitONE
Kathy Tomasofsky, Executive Director, MSBA
Farook Al-Jibouri, Founder and Executive Director, Cyber Code Technologies

The financial services sector has always been one of the most heavily regulated industries but what are the key compliance regulations and challenges that we commonly see across all jurisdictions?

Kathy Tomasofsky: I would say that one of the most important things we see across all jurisdictions is rules concerning your customer (KYC). They may vary in different areas in terms of the level of detail, but all of the regulations ask for the companies to know their customers to prevent money laundering. The second area is risk management. As you enter into the business, understanding your customer profile, understanding the risks, and setting up the appropriate controls in order to effectively do business.

Ibrahim Muhammad: In terms of the ongoing situation; the pandemic had led to a lot of changes and this has pushed regulatory bodies into leaning more towards digital. However, in some markets, people might not have been able to adapt due to lack of infrastructure, so there have certainly been challenges. Broadly speaking, in terms of common regulations we can put it into two baskets: One is the AML (Anti-Money Laundering) and the other is the compacting of terrorist financing. In both these instances and in all jurisdictions, it always comes down to KYC, transaction monitoring and sanction screening.

Farook Al-Jibouri: Particularly when it comes to the Middle East, we do share the same difficulties globally but there are other unfortunate issues and circumstances unique to the region. What I see after the pandemic is a greater diversity when it comes to the Middle East and the level of maturity in the adoption of transformative financial services like Fintech. Some countries have been eager to jump on board but others are still living a hundred years in the past. Still, it’s a cash market where regulators have minimal impact when it comes to controlling the environment. This is what’s driving different regulators in the region to adopt more of a regional approach. The Middle East is ultimately a hot spot when it comes to AML and anti-terrorism. In fact, we are very much leading the way in those areas. The challenge, however, is in how you control different regions and balance them equivalently when there is such disparity in terms of digital adoption.

Is it fair to say that regulators are all for innovation in the Middle East? And is it also fair to say they are taking a lot of inspiration from UK and European regulators?

Farook Al-Jibouri: That’s a complicated question that I couldn’t really give one straight answer to. As I already said, the level of diversity in the Middle East is enormous. There is, however, global pressure from other regulators to bring all of the countries up to the same level and in some cases, those local regulators are simply not doing their jobs. Political complications are slowing the adoption of digital in some situations too. Again, it depends on the specific region. In Saudi Arabia, for example, it was announced recently that the first completely digital bank has been officially licensed by regulators.

Aamer Abedi: I know that when it comes to supporting Fintech start-ups, there is a lot of government support for these businesses in the UAE and Saudi Arabia. Is it fair to say that regulators from the UAE and Saudi Arabia are helping to lead the way in terms of pushing innovation? Perhaps. I believe they are also taking a lot of inspiration from European and UK regulators.

Kathy Tomasofsky: While the Middle East may have different regions that are working at different levels, here in the United States we have forty-nine different entities within a federal regulation and it’s very difficult to navigate. It’s a complex structure and it varies from state to state. For example, the state of Wyoming is very friendly to blockchain and virtual currency but you’re not going to see that in every state.

How far are we from the ubiquitous federal money service license like you have in Europe in the US or the Middle East?

Kathy Tomasofsky: As far as the US is concerned, I’ll answer that question in two parts: The first part is that over the last two years, there have been some movements towards harmonising on a single license. There are currently twenty-nine states that have bonded together. So, if you’re a start-up company and you come into the states, you can have what’s called your level one documents; your financial statements and business plan. These will then be reviewed by a particular assigned state and the twenty-nine other states will say “Okay, we’ll accept these” and it’s as simple as that. Also, we’ve been working with other regulators on harmonising the money transmission law. We expect to have a draft of that sometime this summer, so perhaps beginning in 2023, 2024, we may see a more uniform law.

Farook Al-Jibouri: In the Middle East it can go in different directions. In some countries, opening a bank is extremely easy and in others, you simply can’t do it because the number of banks versus the market has already been defined by regulations. If there is any kind of new license or sub-license, it would be given to the established banks. In other countries though, we are starting to see the licensing of newer digital banks.

How are we doing in terms of open banking in the UK, US and the Middle East?

Ibrahim Muhammad: It’s interesting to see how the US market operates across states. Now, with the UK of course, we’re following the PSD2 standard, and from there we now have open banking. We are enjoying the benefits of PSD2 and though we don’t have passporting rights in the EU we can still redo the applications since they follow the same regulations. So that makes it easier for companies in the UK who would like to expand into EU markets.

Kathy Tomasofsky: In the US, I would honestly say we’re not there yet. There are indirect discussions coming through but we’re not in those open banking discussions like the UK has at this point.

Do you feel that the money transfer industry always plays second fiddle to the payments industry?

Kathy Tomasofsky: I think the introduction of digital and Fintech has made the government more supportive of the whole idea of global payments, whether it’s consumer to consumer or business to business. The fact that remittances fall under that umbrella gives us that support. In general, though, I think it’s more that the banking industry is less inclined to be supportive. It’s very challenging for a company to get a bank account here. There are some things that passed this past January with regard to the strengthening of AML programs and some items there that may help as far as de-risking is concerned, but that remains our pain point here. During the pandemic, these remittance businesses really were a lifeline for many US constituents, and I think that that helped to strengthen the profile of the companies as well.

Post-Brexit, has the government’s stance changes towards the MSB sector? Are they viewing us differently now?

Ibrahim Muhammad: Not exactly, in fact, the FCA has been quite open to supporting innovation in this space and that’s why they were opening up to a lot of Fintechs and new players establishing themselves in the UK. So for the UK specifically I’d say the government has actually been quite supportive.

The concerns that regulators cite can often be addressed by technology. What areas of technology are there in the industry that ensure we meet compliance?

Ibrahim Muhammad: They look into different areas when it comes to transparency; they look into the complaint handling process, incident reporting and the overall system checks and controls you have in place. Of course, AML is one component, so when they do company assessments, they cover all those areas. This assures them of how transparent that entity is towards its customers.

Farook Al-Jibouri: In the past six to nine months there has been a wide deployment of technological systems all across the Middle East but one of the problems is the lack of data. Certain countries probably have a full database but others do not and when you don’t have that database you have to rebuild it. As far as compliance tool deployment is concerned, in some countries, AML is being deployed and pushed by certain regulators but with a specific mandate rather than certain standards. Adopting these systems is definitely going to help in reducing the bureaucracy in the process. Because using certain technologies such as AI and blockchain we can see compliance happening on the fly through automation, rather than being checked manually or via a certain bureaucratic process.

In terms of technology, the US is the most powerful nation on Earth. But when it comes to our payments industry, the US arguably can’t compare with Europe. Why is this the case?

Kathy Tomasofsky: In the US, each state has its own perspective on what’s the best way to serve the consumer. Also, in defense of the regulators, there are so many new kinds of companies and technologies they have to keep learning how to regulate properly. If you look at Bitcoin, for example, some states are regulating virtual currency and have specific laws on their books while others are covering it under general money transmission and some haven’t even taken a pass at it yet. Ultimately, we have lots of interesting products that are being developed and the regulators need to understand what they are, how they work, where is the money going, who holds it, and how to protect the consumers. Then there’s the fact that, at a big-tech level, both sides of the administration are sceptical of companies like Facebook and Google and what they will bring to the US.

Aamer Abedi: It’s not just scepticism at a government level, it’s the big banks too. I know Jamie Dimon, the CEO of JP Morgan Chase is very anti-Bitcoin. You can see these large investment banks being very anti-crypto, but I heard that some of these investment banks have already started preparing proposals for their own cryptocurrencies.

Facebook applied for a money transfer license in Spain a few years ago so you can now use WhatsApp to send money. You have companies like Apple and Google that have money transfer licenses and they’re operating under some sort of regulation. So, should our industry be worried?

Ibrahim Muhammad: The tech giants are definitely jumping into the remittance space and from what I see in the UK and the EU they will have a fight on their hands with the established players. Now, it depends on the approach the big techs take. They might acquire one of the large players and then enter into a partnership or it could be that they establish their own remittance identity since they have a huge customer base to draw from.

Kathy Tomasofsky: In the US I do think that, to some degree, we will see some of the smaller MTOs either disappear or merge with others due to the cost of compliance and licensing. But we’ve also seen in our market research that the selection by a consumer for a particular MTO is often done out of loyalty and is not just price based. I think we’ll see that with age, the younger consumer who’s grown up with technology will be that consumer who is more inclined to go to an Apple or Google Pay transmitter because they will feel a certain loyalty. Even here in the US, in traditional banking, we’re seeing that generation not having traditional bank accounts.

Farook Al-Jibouri: When it comes to the payments industry, what’s happening with the gigantic tech firms is very noticeable and not only in the US. If you look towards China, for example, WeChat predominantly controls the exchange of money over an instant message application and I do think that Facebook took the approach they did because of the success of WeChat. In the Middle East, we don’t have tech firms, but we do have telecom operators who know the technology, and those operators are actually very forward-thinking in terms of bringing those digital wallets and instant money transfers to their customers, particularly in parts of the region where they can get around regulations.

What do you think are the top compliance priorities in the post-pandemic age for any MSB?

Kathy Tomasofsky: In the post-pandemic age, we have seen such an increase here in the US in the remote work area. So security is a big compliance priority for us. We’ve seen specific states here in the US; New York and California, for example; where companies are required as part of their AML program to define what their security requirements are. We’ve seen an abundance of new phishing scams and email fraud here too, so that whole concept is important.

Ibrahim Muhammad: The top priority would be to keep things running steadily despite all the disruption. Because the pandemic has really given rise to something unprecedented. We all know has it has accelerated digital adoption. So, from a compliance perspective, I would say we need to keep pace and adapt to the latest technologies while ensuring that we cater to the needs of the people.

How do we build trust in the industry now, given where we are?

Farook Al-Jibouri: One of the things the ecosystem needs to be ready to build consistently in a post-pandemic world is communication. We all realise now that physical communication is not really there anymore. For example, here in the UAE, we’ve been working with financial companies located a few blocks from here that we’ve never met face-to-face. So, modern communication will be key in re-establishing that flow of data between the technology provider from one side and the receiver from the other side. Also, post-pandemic, you have to be agile with whatever challenges the financial system throws at your feet.

Ibrahim Muhammad: Trust and innovation shouldn’t be competing; they have to go hand-in-hand. Regulatory bodies need to understand what innovation actually brings to the table and how they can ensure that this innovation does not cause any sort of issues with the consumers or stakeholders. It has to be a balanced approach and they have to work in a very collaborative manner. Regulatory bodies need to be more aware of what’s happening in the innovation space, and they should really understand the needs and then set up the regulations accordingly.

Kathy Tomasofsky: I think you have to build trust and communication but I would also add education into the mix, and that goes back to my earlier point – the regulators have so much coming at them that they need someone to help facilitate it all. At MSBA, we represent the services of eighty different companies; from companies that sell prepaid cards to small MTOs. Being able to present such a diverse group to regulators helps to accelerate that communication and education, and helps to build trust.

Our thanks to Kathy, Ibrahim, and Farook for their words and their time.

RemitONE’s award-winning compliance platform is used and trusted by leading banks and money transfer operators (MTOs) all over the world. Our Compliance Rules Engine™ is one of the world’s first business rules-driven compliance platforms. You can simply input the rules set by your regulatory authority and the engine uses its sophisticated algorithm to enforce them.

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The Future of Remittance – The trends and strategies that will shape 2021

The World Bank predicted that global remittances would decline by 20% as a direct result of the COVID-19 pandemic in 2020. It remains to be seen if there is any truth to that shocking figure but one thing is for sure – the sector suffered in 2020 and continues to do so in 2021. The question is, are we already on the road to recovery? And if not, how do we get there?

We spoke to three of our clients and partners from three different regions to gather their thoughts and gain some global insight on what lies ahead for the money transfer industry in 2021 – Hugo Cuevas-Mohr, President & CEO of Mohr World Consulting, Walter D’Cruz, CEO of Moneo Solutions and Nadeem Qureshi, CTO at USI Money. Our very own associate sales director Oussama Kseibati quizzed these thought leaders on the key strategies, the technological innovations that might start to emerge and how traditional agent-based MTOs should be reacting to them.

A year of recovery

Oussama began the discussion by reminiscing on how 2020 was a year that necessitated a wider move to digital finance for the entire financial sector: “For remittance, this meant an increase in the use of digital solutions for cross-border payments.” This included a shift to a surprising number of traditionally cash-based agents using digital means to serve clients, with around 60% of domestic and international cash transfers taking place online.

So the stage has already been set. But according to Hugo, if 2020 was a year of forced change then 2021 is going to be a year of resilience and leaning into the challenges posed by anomalies such as COVID-19 and Brexit. From where he stands, the remittance sector has already proved itself to be a resilient force. Indeed for Hugo and Mohr specifically it has been a very challenging time. Their target market is Filipinos sending money home and many Filipinos working in the UK have seen their incomes reduce or disappear completely in the last 12 months as they tend to work in medical and home care sectors.

He explains: “The era of COVID-19 is an uncertain one and that uncertainty is one of the main issues for the global remittance industry, especially when trying to predict recovery. However, despite the issues, the money transfer industry has seen a lot of recovery and migrant communities are continuing to send money to their families, regardless of changes in their own employment situation.”

Nadeem agrees and asserts that: “Despite the decline last year, the money transfer industry is a resilient one and is a sector which will certainly improve a lot faster than many others.” They also both agree that while they feel recovery is indeed already on the cards, we’ll need to wait until we see the data before we draw any solid conclusions.

Strategies for success

Of course, while the sector might be incredibly resilient, it is also far from bulletproof. This means there are going to need to be some solid strategies to help traditional agents-based actors adapt to the digital push of 2020. The primary trend from which all other trends seem to emerge is a mass migration into the digital realm. This will be particularly relevant for small-medium MTOs, as they will have the flexibility to push further into digital solutions as the industry continues its recovery.

For Nadeem, however, he feels it’s the medium-large institutions that will be leading the way. He explains: “Many of these larger MSBs will be down-streaming activities, hoping for increased access to expanding pay-out networks and other digital solutions, such as e-wallets. As the industry recovers and the needs of larger business begin to grow again, the MSBs will also be looking for new ways to grow too, and this will heavily centre on the digital push.”

Oussama then turns the focus onto blockchain and cryptocurrency, stating: “As a direct result of the pandemic some currencies are going to be more volatile and people could seek safe havens in cryptocurrency, which is something many banks are already doing.”

Walter agrees on this increase in blockchain adoption, which is being fuelled by the mainstream capital markets. He adds: “The popularity and interest surrounding blockchain has been growing for several years now but in 2020 we had begun to see it really explode. As well as the obvious focus on cryptocurrency such as bitcoin, blockchain is also being used by enterprise governments and financial institutions to assist with seamlessly managing the exchange of value.”

Hugo, meanwhile, believes that there will be increased pressure on MTOs for transparency when it comes to fees and FX rates and that blockchain will definitely help with this. And with major names such as JP Morgan already throwing their hats into the ring, blockchain could very well end up being the major player that catalyses recovery as we move deeper into 2021. He also feels that we’ll be seeing more companies working internally to lower costs and more partnerships and integrations by year’s end.

Derisking and the challenger bank solution

According to Hugo, 2020 was the year of the digital tsunami and 2021 is going to be the year of the blockchain and cryptocurrency tsunami and he feels this is going to have a major impact on derisking, which is worse in some countries than in others but is still a global problem. He does also believe, however, that challenger banks might be the solution as long as they are properly integrated with fintech.

He says: “The position of banks as integrators of other services might be making it easier for other banks. This industry has to rely on these partnerships between the new banks and the fintechs and allow them to create solutions together. COVID has certainly pushed that forward, which I guess you could say is something of a silver lining.”

Above all, however, he believes that it’s creativity that is pushing the industry forward and he is inspired by all of the new players doing the groundwork in that regard. Indeed, he feels that’s where the potential for blockchain comes in.

Oussama asks whether there are “solutions out there with companies acting as an aggregator to open up space as a quicker route to market for smaller MTOs and whether or not the big banks will change their attitude towards MTOs accordingly.” He adds: “With HSBC being fined £1.2 billion as a result of derisking recently, it’s unlikely the larger banks are going to shift their viewpoint but challenger banks are coming through to fill that space.”

According to Walter: “The reason they won’t support MTOs is that you’re not only essentially taking their business away by cutting into a piece of their pie but in their eyes, the risk involved is greater than the value that MTO might bring to the table and that’s all down to the fact there’s a lack of transparency between the bank’s compliance and the MTO.”

For Nadeem, meanwhile, he can see major bank attitudes towards derisking getting worse as the cost and the risk in terms of the fines is just too great compared to the benefits. However, he believes the challenger banks might offer a solution here. He explains: “The challenger banks entering the market are not necessarily going to solve the problem but the smaller MTOs looking for partners are going to have a much better chance at finding partnerships with these challengers than their larger counterparts.”

Then, of course, there is the impact of Brexit to unpack and digest. Generally speaking, our talking heads concluded that there is no need for MTOs to panic as long as they can learn to adapt. There are certainly going to be losses for any MTO based in the UK or Europe that deals with those markets, but London will remain a major financial centre and the centre must hold. For more on their thoughts, you can read our full piece on what Brexit means for the remittance sector – https://www.remitone.com/brexit-is-a-done-deal-but-what-does-that-mean-for-the-remittance-sector/

Will 2021 be the year of innovation or survival?

Walter feels 2021 is going to be more about simply “getting through it” than anything else, but that doesn’t mean he’s without hope. He explains: “I don’t necessarily think this year will initially be about the deployment of new technology. A lot of businesses are still recovering from the fallout of the pandemic so they don’t necessarily have the resources available to do a complete revamp.”

The improvements, he feels will be in an “explosion of partnerships,” because fintechs don’t have the resources to do everything alone, whether that’s compliance, risk or customer service. So they will need the help of both larger partners and the ‘little guys’, such as MTOs. He continues: “More connections and lower costs are going to be the case, broadly speaking for 2021 and it’s concepts like the RemitONE ecosystem that are going to help add value across the whole chain.”

Hugo agrees that 2021 is going to be a year of partnerships and collaboration and a shift in mentality across the board. He argues that MSBs should “forget about doing everything themselves. Everything will be almost modular because, particularly for the smaller companies, somebody else will be able to do one specific thing better and cheaper than you can.” Right now it would appear that we’re living in a world of APIs and developments that are great for small companies which can lower their costs and gain access to these solutions, whether that’s blockchain or something we haven’t even seen yet.

Nadeem, meanwhile, speaks of an e-digital compliance evolution: “When you have a sector with a large amount of competition it’s always going to be about who can provide the best user journey. Digital footprints are starting to grow and Fintechs are challenging regulators and pushing them to improve things, whether that’s through something as advanced as iris scanning technology or as simple as syncing their platform with social media to onboard customers more efficiently.”

As Oussama sums up: “It’s going to be a year of smaller MTOs challenging the way things are being executed from a more modular approach through blockchain or other methods and we will continue to see this evolution going into 2022 and beyond.”

A beacon of hope

Throughout the talk, our experts also touched on several other more specific topics regarding the regulatory uncertainties in the Nigerian market to the general emerging markets in the African continent and the cost of acquiring new customers. To see the whole discussion for yourself, you can do so right here.

But the session ended on a resolutely positive note. Our experts spoke of advice for start-up money remittance businesses with no prior experience of the business and suggested that it was still a sector ripe with potential as long as these aspirant start-ups were willing to learn, read, research and understand the market.

They also reiterated what appeared to be the crux of the discussion – that all the different strands of the financial sector need to start working together and forging deeper connections if they hope to succeed and thrive in 2021. That will lead to greater transparency, lower costs and more innovation and RemitONE’s deep ecosystem and malleable compliance network is the perfect middleman to help build and maintain those connections.

For more information or to speak to one of our experts please email marketing@remitone.com

Brexit is a done deal, but what does that mean for the remittance sector?

To say 2020 was a challenging year would be something of an understatement. If the pandemic wasn’t enough, we were then thrown headfirst into a Brexit deal that potentially threatens all UK businesses which trade with the continent. We’re on the other side of a very long, complicated and messy divorce but there are still so many things to unpack and digest, particularly as far as the financial sector is concerned.

Back in 2016, when the referendum result was first announced it was a shell shock to the money transfer and wider financial services industries. But that was almost five years ago now and while London certainly doesn’t look set to be dethroned as a world business capital any time soon, there has certainly been a minor exodus as the UK becomes more of an isolated island.

The immediate ramifications of Brexit

Before the ink could dry on the referendum result, money service businesses across the country began to prepare their backup plans. Of course, those that only served customers in the UK would remain unaffected, as would those operating as SPIs. But those operating under the category of APIs that had a large customer base or agent network in the continent had to apply for new MSB licenses from scratch.

Back in 2017, we posited that it would be the change in banking passporting that would have the most significant impact on money transfer and the wider financial services market. Passporting rights in the years before Brexit helped UK businesses to expand into EU states quickly and at minimal cost and post-Brexit, those privileges would be all but expunged.

Making sense of the Brexit fallout

The immediate fallout of the 31st of December was, as was predicted, that MTOs lost passporting rights. This had a major knock-on effect, with all the MTOs that had accounts within Europe and were safeguarding their funds. A month or so later, we’re now seeing those accounts either being closed or laboured with exorbitantly hiked-up SEPA payment fees.

The UK is also going to find itself fighting for itself as far as regulations are concerned. The European payment regulator that oversees the SEPA payment network will have no interest in fighting for a country that essentially tossed it to one side, after all.

The vast majority of UK-based MTOs will undoubtedly have lost European clients over the last 12 months and most European MTOs will have lost many UK-based clients too. Indeed, all MTOs that rely primarily on inter-European banking will probably lose many more in the ensuing months.

The impact has been compounded by the COVID-19 pandemic and subsequent global lockdowns. One thing this has done, however, is catalyse a deeper digital penetration in the money transfer sector, with estimates that the digital hold on the sector grew from 20% to 30% from 2019 to 2020. That means remittance software and fintechs are going to play a larger role going forward. But that’s not necessarily a bad thing and it might not be the only silver lining.

Is there a plus side for remittance?

While it might have moved on from the EU from a regulatory perspective, the UK is still an important part of the payments network and London will remain well-positioned for money transfers. Indeed, for MTOs with a higher volume of foreign exchange transfers, London is still arguably the best place to do the business thanks to its abundance of high net-worth individuals and the number of major international businesses that call it their home.

We’ve also seen many companies abandon the UK for greener pastures and some European countries (such as Spain and The Netherlands) have greeted these companies with open arms. Other companies, particularly smaller ones, have turned to mergers or partnerships with larger competitors to be able to access their European clients.

Thankfully, as the UK was wise enough to adopt the PSD2 open banking regulations back in 2018, the businesses that could afford to expand into other EU states could do so without being tangled up in miles of expensive bureaucratic red tape. But it’s still an expense that many smaller MTOs could have done without.

Then there are those who have proselytised the idea of pivoting away from Europe entirely. Michael Kent, the Cofounder of Azimo, for example, believes we should be looking towards Africa, where remittance is proving to be a crucial lifeline in the absence of governmental pandemic support.

According to RemitONE CEO Anwar H Saleem, however, there is no need for MTOs to panic as long as they can learn to adapt and lean into the changes. He explains: “London has always been a major financial hub for Europe and this is not going to change any time soon now that we’re no longer a member of the EU. It will, however, push those businesses that remain in London to innovate and lead the way. RemitONE are already committed to charting this new course with confidence.”

Can UK money transfer businesses survive Brexit?

While it didn’t end up being the highly prophesied ‘no-deal Brexit’ for most, for the financial services and remittance sector, it might as well have been. With no agreement on the regulatory equivalence between the EU and the UK, there is still a lot of work to be done.

For those operating in both the UK and the EU, there are certainly some tough choices to be made. But ultimately, it’s going to be up to the UK and the MTOs that have chosen to stay behind to ensure it remains relevant and doesn’t lose its standing on the global remittance stage. Whatever the next few years have in store for us, the best thing any MTO can do is arm themselves with the facts and prepare for every and any eventuality.

If you’re uncertain about the future and are looking for support regarding licensing issues post-Brexit, RemitONE is ready to take your call. Using our industry-leading bespoke and secure money transfer software, we can help any established firm or new entity looking to establish in the UK or Europe to navigate the increasingly complicated logistical and regulatory waters spun up by Brexit.

For more information or to speak to one of our experts please email marketing@remitone.com

AI: Empowering Fintech and Money Transfer Firms

From its humble start in the 1950s to the extensive uses now frequently seen across all industries, Artificial Intelligence (AI) has very clearly grown into one of the most innovative and game-changing technologies. It’s becoming increasingly evident that the role of AI, especially within financial services and the digital realm of remittances, has become crucial for providing improved services. Even over the last decade, AI has continued to evolve, reducing and even eliminating manual processes for the financial services sectors.

Machine Learning and Security

Enabled by predictive power, pattern recognition and enhanced communication functionality, AI is proving it has the potential to boost financial services and transform the way these services are delivered to customers. AI could empower Fintech firms to have more informed and bespoke products and services, internal process efficiencies, enhanced cyber-security and reduced risk.

For example, in the payments industry, AI is currently being used for sanctions screening and fraud prevention – a process underpinning money transfer organisations. Until recently, many organisations screened for sanctions by checking data stored in mass databases. Although this technique is routinely used by most financial services firms, in recent years we’ve seen that AI can be applied to this activity as well as other fraud prevention processes. Learning through experience, the AI technology can begin to better understand the backend data in order to search more quickly and efficiently, ultimately resulting in fewer false positive results.

The Future of AI: Improved End-User Experience

In the next few years, we predict that the financial services industry will certainly begin to see an increased use of AI surrounding security and compliance, as well as other backend processes. However, it is also becoming more evident that money transfer operators (MTOs) could soon be incorporating AI on their frontend applications (mobile apps and online portals) to enhance customer experience.

For example, we’ve already begun to see instances of machine-learning powered ‘chatbots’ offering 24/7 support and guidance to MTO customers. Using natural language processing, these chatbots – amongst other AI-driven voice-based services – will be able to understand queries and provide solutions, enhancing the overall end-user experience.

In addition to this, a less obvious area for AI use we could be seeing in the near future is for managing the rates and fees charged to remittance customers or end-users. By applying machine learning, MTOs could begin to make predictions based on a variety of factors (including existing data, patterns and even seasonal changes) in order to help customers set their rates and charges more effectively.

Where Will AI Go Now?

It’s clear to see that AI and machine learning are beginning to drive a wide range of processes, both within the digital remittance realm and beyond. The outcome of this increase in automation is the opportunity for many companies to work more precisely and efficiently than ever before.

As a result, we can confidently predict that the financial services industry will be seeing a lot more of AI driven technologies. But what would you like to see from the remittance industry going forward?

If you’d like more information about the power of AI within Fintech or would like to engage in a discussion about the future of machine learning, please get in touch at marketing@remitone.com

RemitONE Proud Platinum Sponsor of IMTC World 2020

We’re thrilled to be sponsoring and participating at IMTC World, 16-19 November 2020. The conference is the largest international money transfer, cross border payments and fintech event globally. This year’s online event is packed with sessions featuring the industry’s most prominent leaders, executives and pioneers.

RemitONE CMO, Aamer Abedi will be joined by, Nadeem Qureshi, CTO, USI Money; Richard Spink, Senior Business Development Manager, GBG ; Sidharth Gautam, Head of Sales, AZA and David Lambert, Commercial Director, Transact 365 for what promises to be one of the most informative panel discussions: A New Normal: Getting digital ready for post-pandemic recovery.

Participants will learn how to leverage digital technology to achieve business continuity during the pandemic, transform customer experience, ensure compliance and obtain a remittance bank account. Join the discussion in the Tropical Room at 13:00 GMT on Tuesday 17 November to take part.

Anwar H Saleem, CEO of RemitONE shared “We’re excited to meet with those looking for an opportunity to add value to their business and look forward to re-connecting with current partners. IMTC World is crafted around critical business discussions led by industry experts. We’re proud to participate in this top-tier event.”

Visit our Booth #P2 at the IMTC World, online, from 16-19 November 2020.

Join the event here – https://web.cvent.com/event/1e534a43-8f77-4b6f-af97-a69ccc023f4d/

About RemitONE

RemitONE is a technology and business services firm that breathes innovation and excellence into the money transfer world for all types and sizes of organisations including banks, money transfer operators, micro-finance institutions, telecom firms and start-ups. Our technology allows you to manage your entire money transfer business and connect with our extensive client and partner network worldwide. Our consulting services have an impressive success rate for money service business license applications and alternative bank account solutions.