Sydney: Australia`s A$30 billion ($25 billion) remittance sector is struggling to survive as talks to re-establish ties with banks have so far failed, the head of the Australian Remittance and Currency Providers Association (ARCPA) said on Friday.
Dianne Nguyen told Reuters the ARCPA had made no headway in discussions with the Australian Bankers` Association and the Attorney General`s office, and that she expected the final round of talks, scheduled for next month, to end in deadlock.
The ARCPA wants Australia`s big banks to reopen the accounts of money remittance service firms that the lenders have shut down since 2010, citing rising compliance costs. In December, Westpac Banking Corp became the last of the big banks to pull out of the remittance business.
The anti-money laundering and counter-terrorism financing regulator has also cracked down on the sector, cancelling the license of three remitters late last year.
"After many discussions and representations from ARCPA regarding best-practice standards and sanctions compliance... we have not been able to come to an agreed long-term viable solution," Nguyen said in an interview.
"This will lead to loss of livelihoods for remitters, and also the customers they serve will be affected," she added. "An increasing number of remitters are closing down their business."
Agents use bank accounts to deposit customer funds and settle with remittance network providers, such as Western Union, which help process the actual transfers. The banks` pullout means that money transfers to some countries, like Somalia, are no longer possible using conventional banking services.
Both Nguyen and the Australian Bankers` Association (ABA) urged regulators to work with international counterparts on a global framework to allow banks to serve remitters.
"The key to any solution is a global approach to address the international restrictions that all banks face in serving ... remitters," ABA Chief Executive Steven Münchenberg told Reuters in an email.
The issue of remittances is also on the agenda of the Paris-based Financial Action Task Force, which is meeting in Brisbane this week to discuss ways to choke off funding to terrorist organisations.
