BankersAccuity addresses AML challenges of third-party payment providers in China


BankersAccuity, the global standard for payment efficiency and compliance solutions, today announced a seminar co-hosted with the China Centre for Anti-Money Laundering Studies on the 7th of June in Shanghai. The seminar, entitled “2013: China 3rd Party Payment Anti-Money Laundering Seminar ”, will discuss key industry trends and challenges third-party payment providers in China are facing.

The recent cases such as Liberty Reserve being charged by US Treasury for a $6 billion money-laundering scheme, and seizures of Mt.Gox accounts handling about 80% of the world’s Bitcoin exchanges, has highlighted the vulnerabilities of online payment and exchange services to money laundering. With increasing number of online stores in China accepting Bitcoins, the potential risks could pose a challenge for the local regulators and third-party payment and exchange services in China, which have seen rapid growth over the past decade.

“Digital currency and the exchanges that manage it are becoming more prevalent and, as we saw in the recent Liberty Reserve case, can be tied to money laundering. These activities are naturally attracted to technologies and geographies where regulatory oversight and understanding is immature”, said Hugh Jones, President and CEO, BankersAccuity.

The deposit relationships between financial institutions and third party payment processors can also expose financial institutions to a greater risk without proper monitoring systems and controls. “Financial institutions should take note of this risk and what, if any, role they play as a ‘third-party exchanger’. Reviewing and tightening anti-money laundering policies and procedures will help avoid dirty money from making its way through financial institutions”, said Jones.

Investigation on third-party payment providers in China is challenging due to complexity of the business model, inadequate anti-money laundering control processes and the increasing number of approved third-party payment companies. As such, reporting and analysis of suspicious payments is still a largely ineffective process in China.

To reinforce Payment Service Rules, China’s central bank, the People’s Bank of China (PBOC) released guidelines stating requirements for third-party payment providers to obtain a Service Provision Licence from the PBOC before engaging in payment and settlement services in China. According to the regulations, all third -party payment providers must perform customer screening and record keeping for all customers, including existing ones, before the regulatory implementation. During the seminar, BankersAccuity will contrast this new requirement with the United States FinCEN regulations to understand any best practices that can be leverage by Chinese third -party payment providers. The seminar will also discuss money laundering risks related to high risk commodities in domestic transactions.

BankersAccuity is working closely with regulators, financial institutions and third party payment providers to reduce exposure to anti-money laundering risk and to increase operational efficiency.

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About BankersAccuity

Owned by one of the world’s leading business to business publishers, Reed Business Information and part of Reed Elsevier, BankersAccuity sets the global standard for payment efficiency and compliance solutions. It includes Bankers’ Almanac and Accuity, premier data services that have been providing solutions to banks and businesses worldwide for over 175 years.

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