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In the Oct. 23 issue of Prepaid Trends your lead article "Prepaid Money-Laundering Concerns Grow" included reference to Travelex's Australian Cash Passport product. It inaccurately described Cash Passport as a useful tool for criminals due to an inaccurate representation of the product's registration, features and security monitoring.
As all Cash Passport cardholders are identified to the same standard as bank account holders in Australia, money launderers would have no advantage by using Cash Passport over any bank-issued debit card.
Cash Passport cards should not be construed as vulnerable open-loop cards merely because two cards are issued for each Cash Passport account. As both cards connect to the same Cash Passport account, the transfer of funds from one card to the other is not possible. The balance is not split between cards nor held separately on the cards.
Further, maximum card balances curb any large-scale money laundering activity in comparison to a bank-issued debit cards, which have no maximum balance. This makes the Cash Passport a less attractive option to money launderers. Travelex also has transaction monitoring in place along with the card limits and lifetime transaction limits. These mean Cash Passport is less useful than a bank debit card for money laundering.
In hypothetical example cited by Australian Institute of Criminology research analyst Kim-Kwang Raymond Choo, Travelex would be immediately alerted. If funds are deposited onto one card in one country and then immediately withdrawn from the other card overseas, our monitoring system would identify this action as a suspicious domestic transaction. We also require identification for deposits of funds (except for electronic deposits from a financial institution, in which case the source of funds is clear), and we monitor where transactions occur to ensure that they are consistent with normal use.
Cash Passport cards are not an "anonymous way to store and access cash." All Cash Passport cards require applicants to be physically identified and verified via photo identification before their issue. All transactions are monitored, recorded and retained for a minimum of 10 years. Travelex also reports all signiifcant cash transactions, suspicious transactions and provides International Electronic Funds Transfer Indstruction Reports to the regulators.
The article is therefore misleading in implying that as a stored-value card, the Cash Passport is more vulnerable than any other financial product to money laundering.
Graham Perry
Regional Director, Asia Pacific
Travelex Outsourcing
