Money Transfer News in the UK: What Has Changed and Why It Matters

The UK money transfer space is going through major changes. Most of the updates focus on fraud prevention, customer protection, and improving transparency. These changes affect both individuals sending money abroad and businesses that operate in the remittance industry.

I broke everything down below to make it easy to follow.

1. Mandatory Fraud Reimbursement Scheme

• Banks must now refund victims of authorised push payment fraud.
• The refund covers up to £85,000.
• Refunds should be completed within five business days in most cases.
• In the first three months of the scheme, 86 percent of reported losses were refunded.
• This move is designed to restore public confidence in digital payments.

2. New Four-Day Hold on Suspicious Payments

• From the end of October 2024, banks gained a new power to pause any suspicious payment.
• The delay can last up to four days.
• This helps banks investigate possible romance scams, investment scams, and other high-risk transactions.
• Some industries, especially property conveyancing, are concerned about delays when transactions are time-sensitive.

3. International Remittance Trends

• Money sent abroad from the UK hit a record of about £9.3 billion in 2023.
• India, Pakistan, and Nigeria remain the top destinations.
• The average cost of sending money abroad from the UK is now around 6 percent.
• Costs still vary widely based on the provider, the corridor, and the transfer method.

4. Stronger Regulatory Action

• HMRC launched a campaign against informal money transfer networks, which are linked to an estimated £2 billion in annual laundering.
• The FCA fined three money transfer firms for fixing exchange rates and transfer fees.
• These actions are meant to keep the market fair and protect customers from exploitative practices.

5. Company Spotlight: Small World and LCC Trans-Sending Limited

• In June 2024, LCC Trans-Sending Limited stopped accepting new clients and funds from existing customers.
• The FCA is currently engaging with the company to ensure customer protection and proper resolution.
• This shows how closely regulators are now watching operators in the sector.

What These Changes Mean for Customers and Providers

• Transfers will become safer but may sometimes experience short delays due to fraud checks.
• Customers have stronger protection if they fall victim to fraud.
• Providers must tighten compliance and transparency to stay ahead.
• New players in the industry must prepare for stricter oversight from both HMRC and the FCA.