Just days after the sudden reopening of Western Union, allowing cash transfers to resume in Cayman Islands dollars for the first time in three months, Jamaica National Money Services says it is renewing calls for government to help the remittance company resume taking Cayman currency.
While JN Money Services tries to work with regulators to resume taking Cayman Islands dollars, lines at Western Union locations at Foster’s Food Fair stores stretched to impressive lengths, with some people waiting hours to send money to family overseas.
In a statement released late last week, JN Money Services said it wrote to the Cayman Islands Monetary Authority asking again for help to enable it to accept local currency for remittances. JN executives were in Cayman for a meeting with the regulator on Friday. In the statement, company officials say they hope to be able to take Cayman dollars, but as of Monday afternoon a representative with JN said they still could not take Cayman currency.
JN Money Services Managing Director Leesa Kow said in the statement last week, “We made a similar request of CIMA in August, prior to implementing U.S. 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.” JN, the local agent for MoneyGram and other cash-transfer brands, lost its account with Cayman National Bank in late August and could take only U.S. cash, shipping the cash back to Jamaica for deposit.
With Western Union’s sudden reopening last week, thousands of people have lined up to send money overseas. On Saturday, the line at the Foster’s near the airport wrapped around the store. On Monday afternoon, people in the line said they had been waiting for two-and-a-half-hours and they were still behind dozens of others waiting to send money.
One customer, Hava Lewis, said at about 1:30 p.m. that she had been waiting since before 11 a.m. “I came on Saturday but I had to turn back,” she said.
Another customer, Colleen Clarke, said she had been waiting just as long, pointing to her swollen ankles. “We want JN to open back and take CI,” she said.
Remittance services have to have a bank account to access the global financial system, but concerns over money laundering and terrorists and drug traffickers using cash transfers have led to increased regulation and higher risks for banks. Fidelity Bank, which used to run Western Union in the Cayman Islands, and government finance officials cited “de-risking” as the reason banks in Cayman would no longer give accounts to remittance companies.
Western Union closed overnight in July when Fidelity Group suddenly shuttered the service, but it reopened with just as little notice last week, in a new deal with Scotiabank and Jamaica-based GraceKennedy Money Services.
Jamaica National board member Robert Hamaty said last week that government gave GraceKennedy an unfair competitive advantage in Cayman’s remittance industry, which handled almost US$180 million in cash transfers off the island last year, with about $110 million of those cash transfers going to Jamaica. “The largest player has been left out,” Mr. Hamaty said.
Financial Services Minister Wayne Panton, at an event last week announcing the new Western Union deal, thanked JN for quickly adapting to not having a bank account. Without JN’s move to handle the U.S. cash, Mr. Panton said, “We would not have made it to this point.” The islands faced the potential of having no way to send cash remittances, a service many rely on to support families overseas.