After four months, Cayman Islands currency can again be used for remittances
A months-long crisis in remittance services, used by many in Cayman to support family overseas, appears to be coming to a close. Western Union, which closed without warning in July, reopened with a new company backing the transfers Tuesday morning with as much notice as when it closed.
Western Union, which has been closed for four months, reopened through Jamaica-based GraceKennedy Remittance Services Ltd. The company is reopening the cash-transfer windows in Foster’s Food Fair locations Tuesday and Wednesday and, for the first time since August, people will be able to send remittances with Cayman Islands dollars.
Representatives with government and GraceKennedy declined to comment on the reopened remittance counters, instead waiting until a Wednesday press conference to announce details of the deal.
Elaine Harris, honorary Jamaican vice consul, said, “We are very pleased to learn that the remittance transactions can now be done in Cayman Islands dollars. This will provide tremendous relief for our nationals and others remitting funds to families overseas.”
Last year, people in Cayman sent almost US$180 million in remittances, and more than US$110 million of that went to Jamaica.
Sitting at the newly reopened Western Union counter at the Foster’s by the airport, Leisa Thompson-Garric said she had already had some customers send money before lunchtime.
A GraceKennedy representative at the grocery store said this was the first time the company had operated in the Cayman Islands.
Western Union closed suddenly on a Friday in late July when Fidelity Bank decided to shut down the cash-transfer windows.
After Fidelity, Cayman National Bank, the only remaining bank to give accounts to remittance companies, pulled out of the business and left Jamaica National Money Services, MoneyGram and others without a local bank. The cash-transfer companies restricted customers to only sending U.S. dollars, and banks started charging non-account holders fees to convert Cayman dollars to U.S. cash.
There have been months of closed-door negotiations among banks, remittance companies, government and others since the summer. Cayman National closed the accounts for the remaining cash transfer companies on Aug. 26 and left the services without a way to convert Cayman dollars to U.S. funds on the way to the international financial system.
Fidelity and other banks cited higher risk and tighter regulations in the U.S., Europe and other jurisdictions as the reason behind pulling the services. Many governments have tightened rules on cash transfers, concerned that the services could be used by drug dealers, terrorists and others to move money quietly. Banks in Cayman feared that if they continued to give banking services to remittance companies they too could lose their banking relationships in the U.S.
Without bank accounts, the remaining remittance companies could only accept U.S. cash, which was then transferred directly to a bank off island. The sudden demand for U.S. cash led to banks in Cayman running out of U.S. currency and having to import cash, charging fees as high as $50 to convert Cayman to U.S. dollars for people without bank accounts. In recent weeks, the cash shortage has eased, with some banks no longer capping how much people can convert to U.S.
GraceKennedy Money Services Ltd. is part of the GraceKennedy Group, which has a range of financial and food holdings and is perhaps best known in Cayman for its Grace hot sauces. The company’s money services division operates Western Union locations in Jamaica, the British Virgin Islands, Guyana and six other Caribbean countries.