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Two of the major card networks recently released revised standards for high-risk file locker merchant registration. While file lockers (also known as cyberlockers or cloud storage) can be legitimate, there are also rogue file lockers that are used to host illegal or brand-damaging content. Just one piece of illegal content can cause a file locker to be considered rogue. Card networks are now requiring that acquirers register any file locker merchant or submerchant that exhibits high-risk behavior. Acquirers must closely and continually monitor the performance and activities of these high-risk merchants and submerchants to ensure they are complying with all applicable laws and regulations.

Post Categories: Blog


File lockers go by many names: cyberlockers, cloud storage, file-hosting services, cloud-based storage services, and online file-storage providers, to name a few.  Regardless of what you call them, the business model is the same: users create accounts, save files to their accounts, and can then share these files with others. Many use these accounts to provide friends and family access to photos or video, while others may use it to store business documents.


Post Categories: Blog
transaction laundering

Cyberlockers are file sharing sites that allow consumers to upload files to share with others.  They continue to increase in popularity, but with them come an added risk for acquiring banks. While many cloud storage services legally store content for users, cyberlockers – also known as file lockers – incentivize users to upload popular files for others to download. Due to the largely unregulated nature of cyberlockers, these files may include illegal content such as child pornography, bestiality, rape violence videos, pirated software, movies, and music due to their popularity and demand. Authorities have begun to crack down on this illegal file sharing, as seen by a recent string of legal actions against file lockers, leading to the closure of file sharing websites and increased regulatory scrutiny for cyberlockers and their acquirers.

Post Categories: Blog, High-risk Merchants, Prohibited Content

This week, we sat down with Robert H. Caldwell, Founding Partner of G2 Web Services, to interview him on cyberlockers and marketplace merchants, and the risk they present to the payment system. Read on for Bob’s insights into where cyberlockers and marketplace merchants fit in the payment system, the risks associated with them, and best practices for payment providers to mitigate risk associated with these entities.

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