21 Dec

Alternative Payments Become Prominent for Transaction Launderers

By: Austin Denson, Marketing Coordinator

 

Learn the process to help alleviate threats in your portfolio

The introduction of alternative payment options has shaken up the payments industry. As global competition increases, organizations continue to introduce new payment products and services to the financial marketplace. Acquiring banks and their partners must understand the full scope of these new payment methods. Familiarizing yourself with these alternative payment methods can help gauge compliance-related concerns and business growth opportunities.

 

E-commerce advancements, such as the uptick in alternative payment methods, have bred a seemingly endless array of emerging risks. This makes it difficult for acquires and their value chain partners to perform proper underwriting and merchant monitoring. Scrutiny by card schemes and governing bodies have added another layer of complexity to operations. Many regulatory agencies have made advancements in laying out guidelines and restrictions regarding alternative payment methods. However, risk and compliance management tools must also  evolve, to alleviate threats to the global payments community. The right tools can  pinpoint high-risk factors and expose transaction laundering.

 

Anonymity is imperative for criminals

Virtual currency is gaining momentum as a legitimate means of conducting commerce. Some experts claim that virtual currency could make governments more profitable and efficient. With the increase in credit card regulations, criminals and illegal business have migrated toward these alternative payments systems that offer less scrutiny and more anonymity.

  Figure 1: Online shopper prompted to convert order total to Bitcoin

 Figure 2: Online shopper instructed to purchase Bitcoin to pay

G2 has seen a trend of alternative payments services being utilized as Plan B for illegal online sales and transaction laundering. Its just one more method that criminal syndicates and online fraudsters are using in their arsenal of  of creative strategies to process transactions that bypass transitional merchant accounts and evade detection from acquirers and law enforcement.

 

Download the full report: Plan B Becomes Plan A for Illegal Online Sales to see recent examples of illicit sellers and criminal syndicates rerouting payments and utilizing new systems for financial gain at the expense of acquirers.

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