By: Greg Baxley, Marketing Coordinator
The Intersection of Technology and Payments
Payment Facilitators (PFs) face a unique challenge in the payments industry. Challenges can range from developing your platform and maintaining compliance to funding investments and mitigating risk. Payment facilitators take the legal responsibility for funds in the process of directing them from buyers to sellers, and are subject to regulations when both charging customers and when disbursing funds to merchants. There can also be additional legal burden for companies that facilitate payments to international merchants. Due to the nature and complexity of the business, it is paramount for payment facilitators to ensure compliance to avoid regulatory scrutiny.
Payment facilitators also must comply with card brand rules. Penalties can result in losses in the millions of dollars. Any potential fraud or assessment can have a drastic impact on business operations. This makes it important to have comprehensive solutions in place to identify and eradicate criminal activity, mitigate risk, and monitor merchants. Monitoring and portfolio protection solutions protect from risk such as merchant fraud or collusion between consumers and merchants that could cause brand and reputational damage. They also help with merchants that go out of business with unresolved chargeback liability constituting additional losses.
Anti-Money Laundering and BSA Obligations
The Bank Secrecy Act (BSA) requires all financial institutions to detect and prevent money laundering. Regulated companies must develop a BSA Anti-Money Laundering (AML) compliance program, and all money services businesses (MSBs) are required to register with the US Department of Treasury through the Financial Crimes Enforcement Network (FinCEN). PFs must conduct KYC and AML checks on sponsored merchants, as that responsibility is contractually delegated from the acquirer. Additional US agencies that can have purview into the operations of PFs include the Consumer Financial Protection Bureau, the Federal Trade Commission, the Office of Foreign Assets and Control and the Internal Revenue Service.
Global Payment Facilitator Solutions
As the pioneer of merchant monitoring, boarding and transaction laundering detection services for acquirers worldwide, G2 Web Services provides a critical level of protection. This experience and presence in global markets can help protect payment facilitators from surprises that can arise in international transactions. This gives PFs the flexibility to grow their business in all regions safely and profitably.
Here are some additional resources:
- G2 Solutions for Payment Facilitators Fact Sheet
- How One PF Reduced Unauthorized Transaction Laundering by 97% Case Study