Last year Segpay was re-authorized as a Payment Institution in the UK, and, by extension, the EU as well. It’s an important designation that tells merchants that a processor adheres to stringent governmental regulations around payment and data security, as well as anti-money laundering (AML) and counter-terrorist financing laws. In the EU, payment processors who provide settlement to merchants require a license, highlighting the importance of demonstrating compliance with these laws to ensure funds are safe.
The Segpay team recently participated in AML training with our international risk and compliance consultants, Minerva. We wanted to share some of the highlights so you can see what’s behind our commitment to AML and compliance in general.
Anyone who has seen the US hit shows Breaking Bad or Ozark knows what money laundering is. 
But for everyone else, Bankrate.com defines it as the practice of making money that was gained through criminal means look as if it came from a legitimate business activity. There are three components to money laundering:
- Placement – introducing illegally-gotten funds into the financial system, either through deposits, wire transfers or card payments.
- Layering – obscuring the source of the funds through various accounting methods, including transfers to shell companies and the creation of complex corporate structures.
- Integration – re-introducing the funds into the legitimate economy – for example, by making legal purchases – to make the money appear clean.
As with fighting any type of illicit activity, combating money laundering is an ongoing battle where criminals adjust their behavior, and laws have to keep up – a.k.a., the cat and mouse game. Preventing money laundering requires the participation of an entire organization, from sales to product development to compliance. We take a multi-pronged approach that includes the following practices:
- Know Your Customer (KYC) – all Segpay clients are required to submit KYC documentation during the onboarding process, to verify the identities of the principals involved in their business, including the ultimate beneficial owners.
- Transaction monitoring – the compliance team continually watches for unusual behavior or transaction volumes.
- Tracking regulatory changes – Segpay keeps abreast of the latest laws, and updates procedures accordingly to ensure that we comply with the latest regulations and best practices.
- Training – everyone in the organization is trained to ensure we understand the relevant laws and the importance of compliance. AML training helps everyone in the organization identify certain “red flags” that may indicate money laundering activity.
While not all payment processors are authorized Payment Institutions, subject to AML and other regulations, it is crucial to be held accountable for preventing money laundering and helping stop criminals who would do harm to society through terrorist financing and other means.
Segpay is one of the few major high risk payment processors with operations in both the US and EU that is a licensed Payment Institution. We pride ourselves on being a trusted provider that fosters a culture of compliance, of which AML is a crucial part.
