Security & Fraud

Western Union Under Watch As EU Eyes Money Transfer Market

Western Union is being questioned by the European Union’s antitrust regulators in relation to allegations that it conspired with banks to push its rivals out of the money-transfer market.

“Western Union is cooperating with the European Commission following a request for information on the company’s business in Europe,” spokesman Daniel Diaz said in an email, according to Reuters. Other sources, speaking to Bloomberg, said banks had closed accounts on the basis that there were links to drug-trafficking or terrorism.

The EU is monitoring the multibillion dollar money-transfer market, which will began with the EU’s quizzing of firms in recent weeks, according to two people said to be familiar with the matter who spoke with Reuters.

The European Commission’s investigation centers on claims that banks had collaborated to close the accounts of money-transfer providers. Specifically in Europe, smaller remittance firms rely on banks for their services to handle their money.

World Bank research indicates that the global remittances market is expected to be a $441 billion market. But there’s still many cases of fraud and money laundering associated with remittances because the money is harder to track where it’s being transferred to. Major cases related to this include a 2012 case with HSBC that led a $1.9 billion money-laundering related charge. JPMorgan Chase also settled a $1.7 billion case in 2014 for similar reasons.

For now, the EU is only “closely monitoring competitive conditions in the money-transfer market,” according to EU spokesman Ricardo Cardoso. No further details were provided.


New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.