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Cracking down illegal money transfer channels | Xpress Money

January 25th, 2017

Cracking down Illegal Money Transfer Channels

There has been a recent article in the press about the Dubai authorities cracking down on 25 illegal money transfer shops across the city1.

These outlets were targeted by the Department of Economic Development in response to tip-offs, with authorities saying that such practices harm not just the UAE economy but also the people tricked by such offers.

This is a very valid point. Regulation and proper licensing for money transfer brands exists first and foremost to protect the customer. When using a licensed and authorized money transfer brand, customers can be rest assured that their remitting agent is regulated by the UAE Central bank and the Dubai Economic Department. It has a duty of care towards the customer, and is legally bound to be transparent in the information it provides.

Grey channels, at first instance, might seem cheaper. But they prove incredibly expensive in the long run – both to people and to national economies. For one, they offer the consumer no protection at all. The money is being transferred through unsanctioned channels – which means the probability of sums getting lost is relatively high. Should this happen, there is no recourse for the consumer. The money is lost forever.

For another, illegal channels and outlets make it a business to attract unwary customers. They have no obligation to be transparent about transfer fees, time taken to remit, and collection fees on the other end. Once a customer hands over their money, they are essentially powerless to protest, regardless of how unsatisfactory the transaction is.

In a nutshell, the millions of consumers who choose dependable money transfer brands like Xpress Money do so to protect their money, to benefit from speed and transparency, and ensure their loved ones back home aren’t left waiting for funds that never show up.

With licensed and vetted outlets, the revenue generated from transaction fees is transparently declared to regulators and national governments charging fees on it. These fees help national development, and spur economic activity.

With illegal channels, on the other hand, the fees constitute black money. They never become part of the legal economy, and never benefit anyone except the racketeer. Worse, they can be used to finance crime, terrorism and corruption.

Grey transactions don’t just leave consumers vulnerable. They also deprive economies of revenue, generate black money and thwart anti money laundering and anti terrorism financing programs.

Licensed and legal money transfer channels make economic sense in more ways than one. They safeguard consumer rights, keep hard-earned money safe, give customers the power to demand better service, help boost economic activity, and also make sure that funds aren’t being diverted to fund criminal and terrorist activities.

Written by Sudhesh Giriyan, COO, Xpress Money