UPDATE: LasFin dealings with Alliance said only to impact Lasco Pay for now
Published:Saturday | December 11, 2021 | 12:07 AMKarena Bennett - Business Reporter
Lasco Financial Services Limited struck a deal with Alliance Payment Services Limited in 2019 to launch a co-branded ePay MasterCard, through Lasco Pay, that would allow for cashless transactions with its remittance business unit.
But the deal with Alliance Payment Services, an affiliated company of Alliance Financial Services, could be up for review following action taken by the Bank of Jamaica, BOJ, against Alliance Financial for alleged breaches of the Bank of Jamaica Act, the Banking Services Act, and the Proceeds of Crime Act. The central bank suspended Alliance Financial's licence to operate cambio and remittance services, and revoked its authorisation to operate in the BOJ Fintech Regulatory Sandbox.
The BOJ awaits the outcome of a pending court case involving the principals of Alliance Financial Services, Peter Chin and Robert Chin, before deciding on the next step for the entity. The court hearing is set for December 16.
In the meantime, all Lasco Pay cardholders will be able to continue using their cards without disruption, until the funds have been depleted, Managing Director of Lasco Financial Services Jacinth Hall-Tracey told the Financial Gleaner on Thursday.
She did not detail the next steps for the company which has been working to deepen transactions with the unbanked over the years through the provision of MasterCard co-branded products, which is intended to not only limiting customers’ trips to remittance locations, but also provide a safer means of conducting transactions, particularly in the yuletide season.
Lasco Financial, however, just recently launched a prepaid Visa card, also issued through Lasco Pay, that it could move its cashless business to. The microfinancing and money services company is also in the process of devising other fintech products through the BOJ’s innovation unit, known as its fintech sandbox. The central bank’s sandbox is designed to test innovative financial products, services, and businesses in a cost-effective way.
Lasco Financial has already begun work on Lasco Biz, a new, tech-driven, cashless business model system designed especially, but not exclusively, for micro, small and medium-sized businesses. Under Lasco Biz, the microfinancing firm will act as a merchant aggregator – or a super merchant to a preferred banking institution – in facilitating the small entrepreneurs with or without a bank account.
The service is expected to be particularly useful to entrepreneurs who wish to expand their sales and conduct cashless transactions conveniently across countries. Lasco Financial could arrange for income earned from sales to be transferred to business owners through one of its prepaid cards or leverage its countrywide network of MoneyGram stores.
“Lasco Biz is not impacted,” said Hall-Tracey, regarding Lasco’s partnership with Alliance Financial, but she otherwise would not say whether any other fintech projects in the sandbox would be affected by the central bank’s revocation of Alliance Financial’s participation.
Alliance Financial was formed in 2004 to take over the cambio services business that was being operated by Alliance Investment Management Limited. Alliance Financial was also appointed an agent of MoneyGram that same year.
As a result of the BOJ action, Alliance Financial is not authorised to conduct the business of buying and selling foreign exchange. It is also not authorised to offer MoneyGram remittance services during the suspension of its licence.
Lasco Financial is a primary agent of MoneyGram, as are JN Money Services Limited and VMBS Money Transfer Services Limited, all three of which the BOJ has listed as alternatives to Alliance.
CORRECTION: This story has been updated to adjust the name of the company, which at one point was incorrectly identified as Access Financial.