Online Remittance Services – Is Paying Online Safe?

  • Posted by Jason on January 21, 2015 in Banking Exchanging Money Technology

Almost every week there is something in the news about the tightening of online remittance regulations. Countries all over the world are making changes to their laws to limit people using money transfer services for nefarious purposes, such as laundering money and funding terrorism.

Compliance and Regulations

Whether you’re sending online remittances to the Philippines, India or elsewhere in the world, these changes impact you. In this article we’re going to take a look at a few major remittance markets and see what the law says about international remittances going to and from them.

2013 and 2014 were big years for legislative shake ups in international money transfers, with many countries around the world either introducing new legislation or tightening up existing laws. Let’s take a look at some of the big shifts that have occurred across the US, UK and Australasia.

The United States

In 2014 the US passed a bill called the Money Remittances Improvement Act. This act was aimed at streamlining the overall process of non-bank remittance services keeping in line with regulations. This act enables smaller remittance providers and those sending remittances to keep in line with the law without the overheads of some of the heavier acts, that were targeted at larger institutions such as banks.

The United Kingdom

Her Majesty’s Revenue & Customs has tightened laws on what money can be brought into the United Kingdom and how it can be taxed. This has a significant impact on migrants who need to make sure that they are in line with the tax legislation, in order to avoid falling afoul of the law.

In addition to this, Anti Money Laundering and CTF (Counter-Terrorism Financing) laws in the United Kingdom are among the most stringent in the Western world.

Using unlicensed remittance providers in the United Kingdom is certainly not recommended as, in the event that the government elects to prosecute one, their assets (including any funds in transit) are generally frozen.

Australia & New Zealand

Changes to money laundering and counter terror finance legislation introduced in Australia and New Zealand have caused a number of remittance providers to close their doors. Major banks in both countries have been moving to close off their services to a number of remittance providers, thus effectively stopping them from doing business.

One of the big problems for consumers when this happens, is that if the banking system and or the government elect to cause problems for remittance providers – funds in transit with those providers may be delayed in reaching their destination.

These changes did not impact OrbitRemit, as we have always been proactive when it comes to compliance and all our banking relationships have remained solid as the laws have been updated. However, these changes have caused huge problems for a lot of other players in the international remittance industry.

As you can see there is a big international focus on the flow of money between countries at the moment, and indeed there has been for most of the past two years. This means that it is more important now than ever to ensure that you are using an online remittance provider that is, as OrbitRemit is, fully licensed and compliant in any market they’re working in. If the remittance provider you choose has their assets frozen while your funds are in transit – then your funds get frozen along with them!

If you haven’t tried using OrbitRemit before, check out our remittance exchange rates today by clicking on the money transfer calculator at the top of the page!



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