Western Union is working to reopen its money transfer counters in the Cayman Islands after they were closed abruptly last month, according to a company spokeswoman.
Fidelity Bank, which ran the Western Union branches in the Cayman Islands, Bahamas and Turks and Caicos, made the decision on July 17 to close the money transfer counters in the three countries the following day, surprising many regular customers.
In an email, Western Union spokeswoman Paula Barifouse called the closure here a “temporary service disruption,” but would not say if the money transfer company had found a new bank.
“Western Union is working to restore services as soon as practicable in line with our commitment to provide our customers with reliable and efficient services,” she said.
Cash transfer companies around the world are facing stricter regulations and increased risk based on fears by regulators in the United States and Europe that companies such as Western Union could be used to finance terrorism and launder money. Banks that handle these transactions have to spend more time and money vetting the cash transfer customers or risk big fines from regulators.
The remaining money transfer companies in Cayman, according to the Financial Services Ministry, have until the end of August to find a new bank or otherwise come up with a new arrangement, or they will risk being shut down.
People in the Cayman Islands sent almost $180 million overseas last year as remittances through such companies as Western Union, according to data from the Cayman Islands Monetary Authority. More than $110 million of that went to Jamaica.
Fidelity Bank (Cayman) CEO Brett Hill said immediately after the closure that the risks for services like Western Union and the cost associated with new regulations are increasing, while income from service fees is declining as the industry becomes more competitive. “It’s been an increasingly marginal business for us,” he said.
Fidelity representatives did not respond to requests for comment by press time Tuesday on the potential for Western Union reopening.
Cayman National Bank, which provides banking services for Jamaican National and MoneyGram, is in the process of pulling out of the money transfer business, possibly leaving the companies without a correspondent bank to handle the transactions. Cayman National now is the only bank in the country handing cash transfer services.
Financial Services Minister Wayne Panton recently said government is working with the companies to try to come up with a new agreement to keep the transfer services up and running. Mr. Panton said he does not think the companies will have to shut down their money transfer operations.
A spokesman for JN Money Services, which operates the money transfer business for Jamaican National, said Monday that it is still in discussions with banks in Cayman but does not have a new deal in place. Cayman National has declined to comment on the money transfer agreements several times in recent weeks and did not reply to requests this week.