Afex Money Changing and Payment Service Closes Tel Aviv Office

American global payment and risk management solutions firm Afex is closing its Tel Aviv office only one year after it first opened.

The California based company which provides businesses and individuals alike an alternative to banks for payments across international borders offers a comprehensive range of global payment and foreign exchange services, including foreign currency drafts, wire transfers, risk management tools and designated account executives. Afex boasts that it can handle every aspect of a client’s foreign payment needs, from risk consultation to transaction execution.

The company did not give a reason for the closure. So what exactly went wrong?

Perhaps it had something to do with the cutthroat nature of the competition currently in existence in the field of foreign currency exchanges. If you live in Israel then you cannot help but be inundated with solicitations from such companies. Every street corner in the country’s major cities’ downtown areas has a money changing business.

These businesses do not merely allow tourists to change some cash or traveler’s checks. They also allow people to cash personal checks from foreign banks and engage in wire transfers.

Afex proudly states that it obeys all international money laundering regulations and this may have been part of the problem. Israel recently agreed to cooperate with American authorities in the reporting on any money that people keep in its banks or transfer in any form into the country so that the U.S could better find tax cheats.

As a result, extra fees must now be charged for the cashing of foreign checks and the handling of wire transfers by Israeli money changers which, in turn, required them to charge a higher rate for these transactions. This has made it harder for them to compete with banks for the same services.

And banks, while they may charge a bit more, have the advantage of seeming safer and more trustworthy for the transfer of large sums.