{"id":8240,"date":"2020-02-24T20:50:05","date_gmt":"2020-02-24T18:50:05","guid":{"rendered":"https:\/\/forklog.media\/?p=8240"},"modified":"2020-02-25T02:22:35","modified_gmt":"2020-02-25T00:22:35","slug":"epayments-blocking-facts-and-conclusions","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/epayments-blocking-facts-and-conclusions\/","title":{"rendered":"ePayments Blocking: Facts and Conclusions"},"content":{"rendered":"

On February 11th, the UK\u2019s FCA has blocked the operation of ePayments due to the company\u2019s failure to comply with AML requirements. Pursuant to the regulator\u2019s request, ePayments froze nearly a million customer accounts.\u00a0<\/span><\/p>\n

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In this feature, we take a look at why regulators block financial services and how to avoid getting your money in trouble.<\/span><\/p>\n

What Is Money Laundering?<\/span><\/h2>\n

There is clean and dirty money. If an artist sells his or her painting at an auction, this money is clean which can be proven by the receipt from the auction house. If an official takes a bribe, it\u2019s dirty money and their legality cannot be proven.<\/span><\/p>\n

To make their money clean, criminals <\/span>launder<\/span><\/a> it using fictitious companies, mixing money flows, or mirror transactions. Every year, nearly $2 billion of dirty money are <\/span>legalized<\/span><\/a>. In order to tackle this problem, the G7 nations established the <\/span>FATF<\/span><\/a> (Financial Action Task Force).<\/span><\/p>\n

The FATF develops the anti-money laundering rules (AML). Financial regulators then <\/span>make it mandatory<\/span><\/a> for local companies to comply with AML rules. The most substantial part of AML is due diligence for suspicious companies and <\/span>KYC<\/span><\/a> (Know Your Customer).<\/span><\/p>\n

Why KYC?<\/span><\/h2>\n

Financial companies request your ID to confirm your identity. They have to make sure that they deal with an actual person rather than a fictitious thing created to launder money. Still, if the user tries to launder money using the company\u2019s services, it will inform law enforcement. Regulators can <\/span>punish<\/span><\/a> companies for KYC negligence.\u00a0<\/span><\/p>\n

On the other hand, KYC is important for customers. Such companies work with legal counterparties, rarely find themselves blocked, and are legally bound to fulfill their obligations before their clients.\u00a0<\/span><\/p>\n

What Payment Systems Have to Do With It<\/span><\/h2>\n

Electronic payment systems (EPS) are like banks working with electronic money. They have to comply with AML rules, and their customers have to undergo KYC procedures.<\/span><\/p>\n

EPS offer their own prepaid cards. In order to have the right to do so, they have to do the following.<\/span><\/p>\n