Hawala - Money Transfer System

A hawala is a money transfer system used in the Middle East, Africa and Asia. Hawalas are typically small businesses that do transfers as a side business, but some exist only for that purpose. They typically don't ask any information about the money that they are transferring, and only provide a number to the person sending the money, to be used as a password at the receiving end to get the money.

Records are only kept as to the amount of money transferred, and the other hawala member transferred to. After the books are balanced between the two members, the records are destroyed.

They are popular due to their anonymity, speed of transfer and low cost. Some dealers don't charge a fee, making their income from exchange rate changes.

After the September 11 terrorist attacks in 2001, Hawala has been made illegal in some US states and other countries as it is seen to be a form of money laundering and can be used to move wealth anonymously.