International money transactions are increasingly playing a more prominent role in today's globalized economy. When assessed against the context of the past 20 years, we begin to fully appreciate just how the need for possession of physical cash is being replaced by digital transactions and transfers. Instead of using upfront cash payments, most commodities that have a higher price are now being paid through online transactions. 

Even money exchanged between people has been modified to a significant extent by money transfers, irrespective of the location of that person. These facts highlight the growing importance of money transfers over the past few years. This evolving dynamic has seen a rapid increase in security concerns which has raised questions on the limitation, legislation, and regulations involved in online money transfers. There are a number of different issues that have been brought to the forefront of public concern over the last decade in particular. 

There are many reasons as to why limits on currency transfers are imposed on customers making international transactions. If you have kept up with world’s news over the last few years, you will have noticed that the most important issues emerging around the world are corruption, embezzlement of funds, and terrorism (in no particular order!). The fact that these have been recurring issues which have remained as problematic now as they ever were is a testament to the gravitas of these challenges. 

Corruption and embezzlement of funds are operations that need outlets to hide the cash which has been generated through illicit means. Often, this money is sent outside of the native country to offshore bank accounts in order to keep the cash away from the public (government) glare and the reach of the law in most cases.

Terrorism is another major factor which has imposed tighter constrictions on the process of transferring currency. In most cases, terror groups and armed organizations have financiers and economic backers in developed countries that use services such as money transfers to finance the activities of such groups. 

There are a number of perquisites required that need to be met in order to transfer money abroad if your transaction wants to be seen as legitimate and legal. 

Internal transfer limits

In theory, while many assume that you can transfer any amount that you want as long as you have the necessary funds to do it, the reality is, there a maximum amount set that a person can transfer per day. This can usually be set at a higher rate of around $500,000. 

Currency transaction limits

Large amounts of currencies will usually have checks and balances before they are transferred, and in some cases, there are even limits on the currency transactions. The transfer of currency largely depends upon the compliance policy of that particular bank or money transfer company, as well the limit of your online account. 

Since international money transfers are usually the most common way of financing terrorism and embezzling money earned from corruption, there are currency transaction limits which highlight how large a currency transfer can be.

Failure to comply with any of the limits that have been prescribed could result in higher fees and even fines or termination of accounts. 

Any provider of money transfers needs to be aware of the risks presented to them by money laundering. All applicable money-laundering laws, regulations, and industry guidelines must be strictly adhered to, and failure to do so can result in delays on your transactions taking place, and even in certain cases, the temporary or permanent closures of accounts. Internal controls, including account openings, documentation procedures, and management information/monitoring systems, must be adequate to detect suspicious activity. This is a requirement imposed by the necessary financial conduct authorities.

As the economies of the world become ever more interconnected and ‘globalized', so to do the problems and risks. Those problems appear to be getting more numerous, and the risks greater, fortunately, so to are the counter-measures taken by governments and institutions to prevent them!