Segpay’s Due Diligence Rules Changing for New Clients, Ownership Updates

Due Diligence

Segpay will be required to perform more extensive due diligence on new clients – as well as existing merchants whose ownership changes – starting May 11, 2018.

The new rules come from the US Treasury’s FinCEN division (financial crimes enforcement) and require that we verify the identities of individuals with ownership stakes in the merchants we onboard. In particular, that means collecting information from a Control Owner (the CEO, for example) and up to 10 Beneficial Owners (anyone with a stake of 10% or more in a high-risk business).

For non high-risk merchants, it means up to 4 Beneficial Owners (anyone with a stake of 25% or more).

Segpay already collects information about our merchants as part of Know Your Customer (KYC) requirements; however, as you can see the new rules potentially expand the number of individuals whose information we’ll need  from businesses with multiple shareholders.

The rules only apply to new accounts as of May 11, so existing Segpay merchants are exempt – unless their ownership arrangements change, in which case we’ll need to evaluate the changes to determine if there are new Beneficial Owners who qualify under the new rules.

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