The U.S. Treasury clarified its anti money laundering regulations regarding foreign correspondent banks Aug. 30 and the attention it got was a reminder how weighty the Treasury’s words are to those in the payments world. Any time the Treasury speaks about AML PFs should listen, says Deana Rich, president of Rich Consulting.
Rich, a compliance expert, says KYC and AML and transaction monitoring are all practices that the technology companies who become payment facilitators are not used to overseeing, so attention to detail is highly recommended.
“Payment facilitators need to be cognizant of AML; they are underwriting merchants and the Customer Identification Program must be understood and followed,” says Rich. “Transaction monitoring must be completed to ensure (money) laundering does not occur. These are not things tech companies think about but things they will need to know as a payment facilitator.
“Tech companies who become payment facilitators are now in the payment world and need to understand the basic tenets, and AML is one of them.”
Rich says the caution in the spotlight is a necessary way of business in today’s terrorism-wary world.
“Banks have been backing off doing business with money services because they feel the regulations are too strict, but the regulations make sense because it’s incumbent on us in the financial service industry to not do business with people that fund terrorism,” Rich says.
It is clear that PFs need to think about compliance and AML is a part of that. Based on Be sure that whenever the Treasury comments on any regulations pertinent to payment facilitators, you can read about it here.
We’ve done stories on recent Treasury rules changes affecting payment facilitators, and analysis on increased KYC based on ownership and we’ve done a podcast on that subject too.
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