The war on terrorism and money laundering is driving hundreds of local money remitters out of business after Westpac and St. George Bank confirmed that they were closing the bank accounts of various remittance companies.
Westpac and St. George are the last of the major banks to terminate relationships with hundreds of money transfer companies following similar moves by Commonwealth Bank, ANZ and NAB in recent years.
This appears to be an unintended consequence of recent regulatory actions. A spokesman of remittance companies said: “We have been doing all that we have been asked to do by law enforcement agencies.”
The Australian Bankers’ Association have highlighted concerns with the remittance industry, saying that international and national demands by regulators had become more intense.
Westpac spokesman Danny John would not reveal how many remitters would have their accounts at the bank terminated but said the bank had decided to reduce its exposure to the industry.
Some businesses had invested around $1.5 million since they were established. One such remittance company now employs 25 people across eight branches in Queensland and the Northern Territory.
The industry shakeout may deliver a windfall to large money transfer players such as Western Union and MoneyGram. Philippine Sentinel is waiting a response from WorldRemit which is based in London and Sydney.
Data published last year by the World Bank found that remittance providers sent more than $5 billion from Australia in 2012. The sector also relayed more than $US 2 billion of funds to Australians in the same year. (The New Daily)