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Its been a busy week in the world of global money transfer. Both of the biggest household names have had big news, but for one its was a big win and the other a big loss.
Good Day, Bad Day for money transfer giants Western Union and Moneygram
The U.S. Federal Trade Commission on Thursday said MoneyGram has agreed to pay $125 million to settle allegations that the company failed to take steps to crack down on fraudulent money transfers.
An FTC order in 2009 “required MoneyGram to protect consumers from fraud through its money transfer system, and today we are holding MoneyGram accountable for its failure to do so,” said FTC Chairman Joe Simons.
MoneyGram said it would amend and extend the deferred prosecution agreement with the U.S. Department of Justice for 30 months and will modify its consent order with the FTC. MoneyGram said it would continue to retain an independent compliance monitor and agree to implement additional agent oversight and compliance program enhancements.
MoneyGram said that since 2012, it invested more than $100 million in compliance technology, agent oversight and training programs. The company also has implemented new, industry-leading consumer verification standards, it said.
Meanwhile, Safaricom, Kenya’s leading mobile network operator and provider of M-PESA, and Western Union joined forces again – this time to unlock global money transfers for more than 28 million mobile wallet holders, by leveraging the Western Union global money movement platform.
In a global first, Western Union will power Safaricom to scale money transfers to more than 200 countries and territories. M-PESA Global, a newly optimised feature will allow customers to send money from their wallet for pay-out across the Western Union retail Agent network or directly via Western Union’s access to billions of accounts.
Kenya, a net remittance receiver at $2 billion, last year saw a 13% year-over-year rise in 2017, according to the World Bank. During the same period, outbound remittances topped $36 million, tracking similar growth rates, at 13%.
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