Braced for change: money service businesses

Is a level playing field possible in the diverse money transmitter sector and will HM Revenue & Customs have the resources to go after the non-compliant operators? Dominic Thorncroft , Chairman of the UK Money Transmitters Association (UKMTA) examines these and other concerns of money service businesses (MSBs).

The EU Third Money Laundering Directive does not seem to have warranted any great fanfare by the bigger players in UK financial services, at least the major banks appear to regard most of the obligations as already largely assimilated and factored in to the compliance environment. Not so the UK money transfer sector, which faces new obligations under the Money Laundering Regulations 2007 (MLR 2007) from 15 December in an increasingly competitive market. The sector has witnessed a huge rise in new entrants in the last 18 months. There are currently more than 4,000 MSBs registered with HM Revenue and Customs (HMRC) and the UKMTA estimates that over 3,000 MSBs now offer money transfer through more than 30,000 premises country-wide. In the last six months alone 552 new money transfer companies registered with HMRC.