Payment Companies Suggest Best Practices To Stay Away From Bank Shutouts

Payment companies have proposed a set of best practices to avoid bank shutouts by protecting the money-services businesses against financial crimes.

A group of industry associations consisting of the Electronic Transactions Association (ETA) and the Money Services Business Association (MSBA) have released the latest document depicting a set of compliance best practices laid out revealing how money-services businesses can protect themselves from illicit financial fraud while presenting an additional knock-out effect highlighting the prevention of dropping them as customers in banks. 

The preliminary goal represented in the document is to help parent companies to stay away from bank shutouts by fighting against illicit financial crimes of money laundering and terrorist financing. In addition to this, the authors further hope that this will help in curbing the issue of de-risking which has been prevailing in the industry for a long period by legally dealing with dangers associated with the banking partners. 

Suspicious illicit payments that have been received or sent by a partner on behalf of a customer will be halted while eventually holding banks accountable for processing them. In certain cases, they shall choose to cut off ties with a money service corporation that might constitute an unknown or dubious record of compliance with anti-money laundering services. 

The document presented by the authors on Wednesday consisting of discussions regarding due diligence, and transaction monitoring put forward the expectations in enabling money-service companies to better exhibit that they don’t pose an outsize risk when it comes to their compliance protocols. 

The deputy head of financial crimes compliance for Western Union Co, Clay Roberts stated “The trade groups believe that these compelling standards will enable market participants to more easily obtain banking relationships”.

Advising on the creation of the best practices, a spokeswoman for the American Bankers Associations told that the perceived risks and cash-intensive essence of the money services businesses have made it crucial for many of them to open and maintain bank accounts in the past years. 

Ranging from traditional money-service companies to financial technology startups, a major challenge was to design board spectrum standards relevant to these companies. “The document is designed in such a way that it captures a common ground among all entities”, as made evident by ​​Scott Talbot, senior vice president of government relations for ETA.

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