Insight

The introduction of Value Transfer Services

By:
Neil Jeans,
Katherine Shamai,
Martin Stone,
Richard Storey,
Annelies Homersham
16 Sep 20256 min read
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Quick summary
  • Value Transfer Services (VTS) expands AML/CTF obligations beyond traditional remittance to include any business facilitating value transfers (money, virtual assets, property) as ordering, beneficiary, or intermediary institutions - regardless of business type or size. This means fintechs, crypto providers, and even small businesses may be caught if transferring value is central to their service. 
  • All institutions in the value transfer chain must comply with the “travel rule” (ensuring payer/payee or tracing information travels with the transfer), if required by AUSTRAC register as remitters, and update their AML/CTF programs, technology, and staff training to meet new data and reporting standards.  
  • Obligations apply to both domestic and international transfers. 
  • Successful adoption requires early assessment of a business’s role in value transfer chains, technology upgrades, and embedding new compliance practices across operations - supported by project and change management. 
The introduction of Value Transfer Service obligations under Australia’s AML/CTF reforms significantly broadens the scope of compliance requirements, affecting a wide range of businesses and requiring new processes, technology, and training.
  • Value Transfer Services (VTS) refers to the movement of value (money, virtual assets, property) through a chain of institutions, not just traditional remittance providers.
  • The new regime replaces the old remittance framework, expanding the scope to include more types of institutions including fintechs, crypto providers, and even sole traders or small businesses if they facilitate value transfers. 
  • The aim is to enhance transparency, traceability, and align with international FATF standards. 
  • You are caught if you provide one of three new designated services (items 29, 30 or 31) as either an ordering institution (acting for the payer), a beneficiary institution (acting for the payee), or an intermediary institution (passing value/messages between the two). 
  • The obligations focus on the function being performed, not the legal status of the business - so many more businesses may be affected. 
  • Transfers that are “incidental” to your business (e.g. receiving payment as part of selling a car) are generally not caught, but if transferring (receiving or sending) value is central to the services being provided, you are likely to be providing value transfer services. 
  • Travel rule: All institutions in the value transfer chain must ensure that required information (about payer and payee, and/or tracing information) “travels” with the transfer—even for domestic transactions. 
  • Customer Due Diligence: Ordering institutions must collect and verify information before passing on value; beneficiary institutions must check the information is complete before releasing value to the payee. 
  • Intermediaries: Intermediary institutions must keep records, pass on information, monitor for suspicious activity, and report to AUSTRAC as needed. 
  • Remitter registration: Many businesses caught by the new regime will need to register as providing remittance services, which comes with additional regulatory and criminal penalties for non-compliance. 
  • If you are providing VTS which involves transfers to or from overseas you will also be required to report IVTS to AUSTRAC. 
  • IVTS reporting will streamline the current IFTI reporting into a single report, replacing the current dual IFTI reporting system for financial institutions and remittance providers. 
  • The IVTS reporting obligation will shift to the entity with the closest business relationship to the customer, aiming to improve data quality and accuracy. 
  • Delegation of reporting (likely to an intermediary institution) is possible, but liability remains with the original institution. 
  • Assess your role: Map your business activities against the new value transfer chain to determine if you are an ordering, beneficiary, or intermediary institution. 
  • Update AML/CTF programs: Revise your compliance program to address new data, technology, and reporting requirements. 
  • Technology uplift: Prepare for significant system changes to support the travel rule and reporting obligations. 
  • Staff training: Ensure operations and back-office staff are trained on new processes and obligations. 
  • Stay informed: Monitor AUSTRAC updates and guidance. 

Business change and adoption 

Successful compliance requires both technical and business change - project management, change management, and stakeholder engagement are critical for embedding new practices across the organisation. 

We are here to help 

While the new AML/CTF requirements won't be a requirement until 31 March 2026 for existing reporting entities and 1 July 2026 for new reporting entities, it is vital to start planning and preparing for compliance now. 

With a short lead time to compliance and limited AML/CTF experts across Australia, demand will only continue to increase as the compliance date approaches.   

Contact one of our AML/CTF experts if you would like to discuss any of the above. 

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Authors
  • Neil Jeans
    Neil Jeans Neil has a unique background in financial crime risk management spanning almost 30 years, including working at senior levels managing AML/CTF, Sanctions and Anti-Bribery compliance across Europe, the US, Latin America, Asia, and Australia within two major global investment banks, one European financial services company, and a major Australian bank. View Profile
  • Katherine Shamai
    Katherine Shamai Katherine has over 24 years experience in providing financial crime, governance, compliance, risk and controls advisory, and investigative services to a range of clients including federal, state and local government agencies and departments, not-for-profits and NGOs, gaming, financial services, and ASX listed companies. View Profile
  • Martin Stone
    Martin Stone Martin has held wide-ranging roles in financial crime risk management in Australia and Europe over the last 20 plus years, including as AML/CTF Compliance Officer at two of Australia’s leading financial services organisations, and Divisional Money Laundering Reporting Officer at two of Australia’s largest banks. View Profile
  • Richard Storey
    Richard Storey Richard is a financial crime risk and compliance expert with a strong consulting pedigree, supporting clients to solve complex regulatory challenges across banking, gambling, digital finance, and funds management sectors. View Profile
  • Annelies Homersham
    Annelies Homersham Annelies has a proven track record in leading complex and sensitive transformations across diverse industries. Her expertise lies in navigating legislative, political, and organisational priorities with a commitment to excellence and practical solutions. View Profile

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