paypers report graphic_72dpiGone are the days of picking up illegal drugs at night in a dark alley. Sales are being pushed online through Transaction Laundering. Illegal drugs can now be bought online, via credit cards, day or night.

 

On 26 May, the UK passed a Psychoactive Substances Act. This act, criminalizes the production, distribution, sale and supply of synthetic drugs, previously known as “legal highs.” Synthetic drugs are one of the fastest growing segments of the illegal drug trade. The passage of this law is only one reason that transactions are quickly shifting from the street to ecommerce.

 

Transaction Laundering (TL) occurs when a hidden website uses the merchant account of an approved front site to conceal the true nature of sales. G2 has seen both an increase in TL and an increasing proportion of illegal drug sales in TL cases this year. G2 expects this trend to continue alongside increasing risk of regulatory scrutiny and card scheme assessments.

 

Acquiring banks, processors, ISOs and payment facilitators already recognize that card-not-present (CNP) environments have become a preferred method of concealing violating products. The same will be true for sales of psychoactive substances. Even those that serve low-risk merchants are not immune.


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