Does your business deal and exchange currency, cash checks, issue money orders, or transmit funds? If so, then the Financial Crimes Enforcement Network classifies you as a money service business (MSB). Since money service businesses are highly susceptible to money laundering or theft, you could be at risk. Think of how much cash you deal with daily. How confident are you that all that onsite cash is always secure?
Banks Have Additional Costs and Regulations with Money Service Businesses
Though banks take extra precautions to comply with FinCen regulations, they transfer those higher fees to companies like yours to cover risks. David Barclay, Director of Global Marketing, Tidel argues, “Money service businesses have been around a while, but what really isn’t well-known are the restrictions placed on banks that accept deposits from MSB’s. In fact, several banks have ended their practice of receiving money from MSB’s, as the effort to maintain compliance is simply too costly to bear.” The most confident solution, however, is a simple one.
Effective cash management systems, inclusive of smart safes, help money service businesses, because they provide complete traceability and accountability to all cash transactions. They not only secure the deposited cash, they can also connect to an MSB’s banking partner, providing a level of transparency never before seen.
Here’s an example of how a money service business works today. Bob Smith handles fifty money transfers a day at his convenience store. He uses a local bank for his deposits. However, due to heightened overhead costs in managing his account, Bob’s bank wants to end their relationship, as the fees they charge Bob for his business don’t adequately cover their risks. Bob’s relationship with the bank isn’t his only problem, though. The four-day down-time between the money wire and its settlement creates a large window of opportunity for fraud.
Tidel’s Smart Safes Address Money Service Businesses’ Needs
Using a smart safe and leveraging the services of a Cash in Transit (CIT) provider, Bob could mitigate many of these risks. This modern technology provides a visible, transparent, secure, and accountable system for all parties. Tidel’s Series 4 unit addresses the requirement of an MSB quite well. The Series 4 features a 7-inch color console with simple menu navigation and very easily connects to Bob’s network. That’s not all, though. The Series 4 can connect to a myriad of peripherals, including note dispensing, tube vending, and additional storage, offering unmatched flexibility to address a wide range of MSB needs.
Money Service Businesses Can Face Severe Banking Challenges
Bob’s Convenience Store is hypothetical, but identical problems flourish in the UK, US, Canada, and Australia. One money exchange business in Australia recently shut down after twenty-two years in operation, because the bank closed their accounts despite a spotless record. The owner remarked, “I know nothing about anything else. Money transfer is what my family has been doing for years, and today, we…have to close shop.” Similarly, an MSB in the US had this to say: “My partner and I have reached out to over a hundred banks. We’ve been denied banking by all of them. No reasoning is provided for. We managed to get accounts opened in two.” He then added that those two closed their accounts when they discovered they were dealing with an MSB.
These stories clearly reflect a severe situation, which is why it may be time for MSB’s to consider a different approach – one that involves a proven cash management system, a system that provides not only security for a store’s cash, but complete transparency for all transactions as well as counterfeit detection. These features, while critical to a business such as an MSB, might be what is needed for their most important partner – banks – to have a renewed viewpoint of MSB’s as an important and worthy member of their client portfolio. Find more about how you can fight fraud and theft, and find solutions to your banking problems by visiting us at www.Tidel.com.