(RemitOne and Spark work together to provide bankless alternatives to MSBs facing de-risking.)
RemitONE and Spark (formally Bitspark) announced today their partnership to offer Money Service Businesses (MSBs) from the UK, Europe and North America a remittance solution that addresses the de-risking or remittance bank account issue they face. The joint solution does not make use of a remittance bank account and makes it possible for MSBs to send remittances through formal channels with ease.
Spark is a blockchain company specialising in cryptocurrency money transfers. They provide inclusion points for MSBs to cash in and cash out, allowing businesses to send payments quicker and cheaper, without the need for a bank account. MSBs can also access Spark created stable cryptocurrencies pegged to 180+ national currencies, opening them up to new markets that were previously inaccessible.
De-risking is a common response by banks and regulators worldwide to address and mitigate risks pertaining to Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT). Tougher banking regulations require MSBs to follow strict AML and Know Your Customer (KYC) protocols. Evidence suggests that some banks are denying services to firms and countries which appear to have higher risk and lower profit. Blockchain technology can help with de-risking by reducing regulatory compliance costs while increasing transactional transparency.
The combination of regulation and de-risking has meant it is more difficult for MSBs to gain both an operating license and a money service business bank account.
There is a lot going on in Money Transfers at the moment. Being global in nature, this industry is open to influences from many directions, including cultural changes and geo-political movements. The combination of regulation and de-risking has meant it is more difficult for MSBs to gain both an operating license and a money service business bank account. It also means that for small to medium sized MSBs that are currently trading, retaining bank accounts has become very difficult as the banks continue with their de-risking policy.
Modern technology can provide many of the answers to getting an MSB in shape for these market trends. A modern platform can help MSBs go digital whilst helping them cope with increased regulation and compliance.
The RemitONE and Spark partnership offers an innovative solution to the money transfer industry and a possible lifeline to thousands of MSBs worldwide that are struggling to maintain their remittance bank accounts.
Mr. George Harrap, Chief Executive Officer at Spark, commented:
“We are excited to be working with RemitONE on solving the biggest issue in the industry right now; that of de-risking. This is a global trend which we believe blockchain technology can be a solution for wherever you may be globally. With RemitONE’s full featured product suite for MSBs, we look forward to enabling new blockchain based remittance locations globally on the Spark payment rails.”
Mr Aamer Abedi, Chief Marketing Officer at RemitONE, commented:
“The RemitONE and Spark solution is the need of the hour in our industry. De-risking is an ongoing issue preventing MSBs to operate their businesses successfully. We appreciate and understand why de-risking exists but we also believe that it is this new breed of FinTechs such as RemitONE and Spark that will come up with sophisticated solutions making use of modern technology to address these issues in our great industry. The RemitONE and Spark solution is a step in the right direction and we are proud to be part of it.”