04 Jun 2024
Most of the over 1 million Ghanaian diaspora live in the UK for jobs and work. They offer financial aid back home to their families through every send money to Ghana from UK they undertake with different financial institutions.
The Ghanaian economy is developing with a nominal GDP of $73.77 billion and a GDP Per Capita income of $2,203.6.
Owing to this, employment opportunities are scarce.
Hence, there is continuous migration from Ghana to developed countries for jobs!
But do you know what lies behind the seemingly amazing remittance transfer service features offered by reputable companies like ACE Money Transfer?
Yes, you guessed it right!
It is the seamless compliance by the service providers with the regulatory framework the UK government has put in place.
Let’s navigate the UK remittance regulatory framework.
UK is one of the strongest economies worldwide, with a nominal GDP of $3.09 trillion and a GDP Per Capita income of $46,125.3, attracting millions of migrants. The basic rules and regulations for sending funds from the UK abroad or to the UK from another country are surprisingly easy.
All the banks and payment service providers in the UK have to meet certain simple conditions for transferring funds and comply with the Financial Conduct Authority (FCA), as well as HM Revenues and Customs (HMRC).
However, it is only for you to look for the hidden fee of the currency exchange rates when you send money to Ghana, as service providers enjoy a certain level of autonomy in their remittance transfer operations.
Before delving further into the regulatory framework, remember that the UK remittance transfer regulatory framework is designed to support Anti-Money Laundering (AML) measures to combat fraud.
The reason?
The UK is the second-largest money-laundering hotspot worldwide, with about £88 billion laundered annually. Financial fraud costs the UK over £130 billion every year.
According to the UK remittance regulatory framework, there is no upper limit on the funds you wish to send back to Ghana or elsewhere.
Wait.
It does not mean you can send as much as possible.
It is because:
· Different financial institutions have set different limits ranging from £50,000 offered by HSBC to £100,000 offered by Barclays (business) and Lloyd’s
· The risk factor increases with a large amount being transferred
Online money transfer service providers like ACE Money Transfer keep the limit low so that the risks involved are mitigated in case something goes wrong in a financial transaction.
Another necessary regulation is the customer due diligence the financial institutions must conduct.
If you want to money transfer to Ghana your payment service provider must conduct due diligence as the regulatory framework demands.
However, the payment service providers must conduct Enhanced Due Diligence (EDD) if the funds are transferred to high-risk states or business sectors.
From the perspective of the customers, you must provide your:
· Full name
· Address linked to your bank account
· IBAN (in case you want a transfer through a bank)
The service provider must verify the details mentioned above for international money transfers.
In addition to this, the service providers are required to ascertain details about the transactions.
How they do it depends on what service provider you choose to send funds to Ghana from the UK.
The Payment Services Regulations 2017 (PSRs) stipulate every requirement for transferring funds from the UK to Ghana or any other country.
The need for it was intensely felt then after the spike in money laundering and financial fraud in the UK.
In this context, and to ensure seamless compliance, ACE Money Transfer offers fully protected online money transfer services in and outside the UK.
It makes registration and authorization by the concerned financial authorities in the UK mandatory for service providers. If they fail to comply, they can be penalized with heavy financial penalties and barred from operating.
The Financial Conduct Authority (FCA) is primarily mandated to oversee regulatory compliance in the UK.
The FCA has the legal authority to exercise its powers to ensure that the service providers offering online remittance transfers comply with the regulations.
The FCA can call the law enforcement apparatus for assistance in the UK if needed.
The other financial body the UK government has entrusted the payment regulation compliance with is the Bank of England.
However, the Bank of England essentially acts as a ‘Settlement Agent’ if a dispute arises between the FCA and an online remittance transfer service provider.
The UK is concerned about the tax implications in financial matters, including online money transfers from the UK to Ghana or elsewhere.
Not only the UK but all developed countries take taxation fairly seriously.
Why?
Well, because their economies essentially stand on taxes.
For online money transfers, you are not directly taxed in the UK by the authorities concerned.
The service providers you choose to transfer funds to Ghana from the UK are taxed.
The service providers, in turn, to ensure compliance, pay the taxes based on their revenue generation and other financial considerations.
Although PSRs broadly encompass every aspect of online money transfers, the piece of legislation keeps evolving with time to adjust to the changing times and adapt to the latest updates in dazzling technology.
Therefore, it also covers the following areas in online remittance transfers to Ghana.
· How a business should be run
· Ensuring that service providers behave appropriately and treat their customers with respect
· Follow consumer credit rules for credit-related activities
· Supervision rules regulating how to interact with FCA
· Addressing complaints in the most appropriate and customer-friendly manner
This is the regulatory framework that online remittance transfer service providers have to comply with in the UK.
Every money transfer from the UK to Ghana or elsewhere operates under the regulatory framework explained above.
You can have immense confidence in ACE Money Transfer if you choose the firm to transfer money to Ghana along with strict and seamless regulatory compliance.
The firm offers live and market-competitive currency exchange rates and charges you a low fee for the online remittance transfer services you get from it.
All of this comes with swift and safe transfers, broad service access, and 24/7 availability in over 100 countries worldwide.
Moreover, the fee is applied only when the amount you send reaches a specific limit, below which the transactions remain fee-free.
Imagine fee-free transactions with live exchange rates within the operational autonomy provided by the UK regulatory framework, which some service providers normally exploit to offer fixed exchange rates and charge high fees!
The UK remittance regulatory framework is a set of laws that oversees the mechanisms through which remittances are sent to foreign countries, including Ghana. This framework ensures that remittance transfer service providers operate under the set rules and regulations and are penalized if they violate them.
There is no particular limit on the amount that can be sent from the UK to Ghana or elsewhere. However, certain banks in the UK are allowed to send between £50,000 and £ 100,000, which has to be strictly regulated by the UK’s Financial Conduct Authority (FCA).
Customer Due Diligence (CDD) refers to the verification mechanism that a remittance transfer service provider must exercise to check the credentials of its customers. This includes seeking basic details about the customers, such as their name, address, bank details, the purpose of the transaction, and so on.
Customer Due Diligence (CDD) is critical within the UK’s remittance regulatory framework because the UK was a hotspot for money laundering not too long ago, coupled with financial crimes amounting to billions of Pounds annually.
The Financial Conduct Authority (FCA) in the UK is mandated to supervise remittance regulatory compliance and is authorized to penalize financial institutions that do not adhere to the regulatory framework. The FCA works in close coordination with the Bank of England, whose major role is to reconcile and settle disputes if they arise. The Bank of England is, therefore, called a ‘Settling Agent’ in this context.
Resource(s)
· Ghanaian Diaspora
· Ghanaian GDP
(GDP (current US$) - Ghana | Data (worldbank.org)
· Ghanaian GDP Per Capita
(GDP per capita (current US$) - Ghana | Data (worldbank.org)
· UK GDP
(GDP (current US$) - United Kingdom | Data (worldbank.org)
· UK GDP Per Capita
(GDP per capita (current US$) - United Kingdom | Data (worldbank.org)
