AML and KYC Guide For Mobile Payment Providers

With the effects of technological developments, we are witnessing the change in the payment industry. Every year we meet a new payment system. Each new payment system is gaining great popularity thanks to the different facilities it provides to the customers. One of them is "Mobile Payment Systems".


If we need to define mobile payment technologies basically, the infrastructures that we can access to Bank or GSM operators through certain technologies and verification methods through digital mobile technologies are mobile payment systems. For example, a service provider who wants to mediate payment establishes a service point that can interact and verify with mobile technologies, and responds to the requests of end-users with mobile technologies, making the payment process. The World Bank has classified mobile payment systems into 4 main categories. These are mobile financial information services, mobile bank and securities account services, mobile payment services and mobile money services.


Financial Crime Risks in Mobile Payments


Mobile payments provide businesses the opportunity to provide more personalized and high-quality services, using customers' location, shopping habits and preferences. On the other hand, it provides more efficient use by providing ease of access and comparison of the price of the products in different places, discounts and other campaigns. In addition to these advantages, mobile payments face many threats and security problems. Criminals have tried new methods and new systems for money laundering from past to present. Due to the strong AML programs of banks and existing financial institutions, criminals try to commit money laundering through new financial services. Mobile payment systems, therefore, face financial crime threats such as money laundering and terrorist financing.


In line with these risks, mobile payment providers are also subject to AML / CFT obligations. In the rest of the article, we will explain the anti-money laundering requirements of mobile payment providers.


AML Compliance Program for Mobile Payment Providers


Mobile payment providers and all other financial businesses have to have a compliance program according to AML / CFT obligations and implement it. A compliance program includes the company's AML compliance officer, AML control processes, independent audit testing, and employee training. The compliance officer is responsible for the implementation of the company's compliance policy. The company's board of directors must provide compliance officers with the necessary facilities to implement the compliance program. Also, the steps to be implemented in the AML control process such as "Know Your Customer" and "Customer Due Diligence" procedures are included in the compliance program.


KYC and CDD Procedures for Mobile Payment Providers


Know Your Customer and Customer Due Diligence procedures are the basis for AML / CFT compliance. Mobile payment providers have a wide range of customer profiles. Therefore, mobile payment providers have to detect risks and threats during the customer account opening process. The purpose of the risk assessment is to implement a risk-based approach. For a risk-based approach AML control program, mobile payment providers must follow CDD and KYC procedures in the customer onboarding process.


In this process, identity verification is applied first. Then, customers are checked on international lists that include high-risk and banned people. These lists are generally sanction and PEP lists. There are thousands of sanctions and PEP lists in the world and businesses cannot control their customers manually, this is impossible. Sanction Scanner database contains sanction, PEP and adverse media data of more than two hundred countries. Sanction Scanner always monitors and configures this data instantly. With our product AML Screening Software, mobile payment providers can control their customers in global comprehensive sanction, PEP and adverse media data. Sanctions, PEP and adverse media scanning are completed in seconds. In addition, mobile payment providers can integrate AML screening software with their own project with API support and automate all control processes.


Detection of Suspicious Transactions in Mobile Payments


The purpose of the compliance program is to detect financial crimes. Suspicious transactions carry a high risk of financial crime. Therefore, mobile payment providers are responsible for detecting suspicious transactions in financial transactions they mediate and reporting these suspicious transactions to financial intelligence units. That's why mobile payment providers need 3rd party software to control all customer transactions.


Our AML Transaction Monitoring software enables mobile payment providers to automatically control all customer transactions according to specific rules and scenarios. With this software, the mobile payment provider creates rules and scenarios according to their risk level. Customer transactions are automatically scanned according to these rules. If rules and scenarios are triggered, the system generates an alarm. The compliance officer then examines the transaction that generated the alarm and reports it to the authorized units with the suspicious activity report.




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