The electronic transaction processing business is undergoing rapid transformation. Traditional players, innovators, and disrupters are all vying for a share of current and future revenues as new applications and technologies multiply. From mobile wallets to peer-to-peer payments to tokenization and encryption to blockchain, Gilbert Reese understands how regulators view the new financial tools.
Third Party Payment Processors generally are not subject to BSA/AML regulatory requirements. They are not required to establish compliance programs that check the types of risks which organizations such as banks and MSBs under the regulation of BSA normally do. Some processors are vulnerable to money laundering, identity theft, fraud scheme and other illicit transactions. Payment processors pose greater money laundering and fraud risk if they do not have an effective means of verifying their merchant clients’ identities and business practices. Risks are heightened when the processor does not perform adequate due diligence on the merchants for which they are originating payments.
We work with banks and credit unions to develop and maintain adequate policies, procedures, and processes to address risks related to their relationship with third party payment processors.
We work with third party payment processors to better prepare for the demands of BSA/AML requirements imposed by partner banks to maintain banking and processing relationship.
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