Moneygram CEO: “The More We Know About You, The Easier It Is to Send Money”
In an interview with Cointelegraph, Alex Holmes, Moneygram CEO, cited importance of KYC (Know Your Customer) regulations and user verification.
Moneygram, a major money transfer company based in the US, recently attended the Money 20/20 conference to offer innovative insights on the growth of the international remittance market. In an interview with Cointelegraph, Alex Holmes, Moneygram CEO, cited importance of KYC (Know Your Customer) regulations and user verification.
One merit of Bitcoin and other cryptocurrencies like Monero and Litecoin is its ability to enable any user on the network to send payments without boundaries. For instance, a user from the Philippines can easily send a Bitcoin transaction to a friend in South Korea, regardless of the amount.
In early 2009, Satoshi Nakamoto introduced Bitcoin as a peer-to-peer cryptocurrency network that is capable of handling payments without the presence of a mediator.
The original white paper reads:
“A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”
The absence of a mediator also suggests that users can send any amount to anyone in the network with substantially lower fees, without the possibility of transaction reversals.
Moneygram & KYC regulations
Unlike Bitcoin, Moneygram is a traditional remittance solutions provider and money transfer company. To settle transactions, Moneygram is required by both local and international financial regulations to store sensitive user data, for various reasons including law enforcement support.
Thus, for larger payments, typically transactions worth more than $10,000. Moneygram requires a thorough user verification phase.
“You can send well over $10,000 dollars but we collect more information at that point in time,” Holmes told Cointelegraph in an interview.
The spokesperson further noted that the more information the company has on a user, the firm can process more transactions for that specific individual.
“KYC is extremely important in our industry,” Holmes added. “The more we know about you, the easier it is to send money around the world.”
However, this conventional mindset of leveraging user data for international transactions can lead to several disastrous situations, which include user information vulnerability, elimination of online privacy, and law enforcement’s control over personal data.
With remittance networks such as Moneygram’s tight KYC regulations, government agencies and law enforcement will be more than capable of spying and tracking down transactions of users with vague reasons.
Moneygram’s stance on cryptocurrencies
When asked about the cryptocurrency market and its competitors like Abra, Holmes stated that cryptocurrency remittance startups will most likely struggle to gain significant market share.
For most part, his insight is relatively accurate considering Abra’s limited growth over the past few years, despite millions of dollars in capital secured from venture capital investors.
“I think it's very difficult to grow and scale in the industry,” Holmes stated. “Certainly, frontend technologies have enabled a lot of digital currency competition. Backend technologies like Blockchain has the ability to make entry into the business potentially easier. At the end of the day however, managing cross border payments is extremely complex and requires a lot of investment.”