Crypto Acquiring and AML Risks

Accepting traditional fiat currency and converting it into cryptocurrency before transferring it to the customer.

Enabling customers to make payments directly in cryptocurrency.

Chargeback disputes initiated by cardholders can lead to significant financial losses. Fraudsters may exploit the system by either passing stolen cards through their channels or disputing transactions themselves, claiming that the services were not delivered. As a result, these malicious actors can recover up to 80% of their initial investment, considering fees and nominal service expenses.

Compliance with merchant category codes (MCC) and adhering to regulations is crucial. Non-compliance, especially for high-risk categories like gambling or forex trading, can result in penalties starting from $25,000. Trying to deceive payment processors by misrepresenting the purpose of transactions or violating their rules is ineffective since the focus is on the transaction's purpose visible to the payer.

Negative perceptions can cause non-financial losses that impact your business's reputation. These losses can be translated into real financial setbacks, missed opportunities, and a decline in customer trust.

Establish robust anti-money laundering (AML) policies and integrate them into all aspects of your operations. AML policies go beyond mere documentation; they should be actively applied in your processes and procedures. By adapting to the specific needs of your business and meeting customer expectations, you can demonstrate your commitment to regulatory compliance.

Conduct rigorous checks on merchants accepting payments. Scrutinize their activities to ensure they align with their declared business functions, evaluating factors such as turnover, average transaction values, market presence, website traffic, and language diversity. Sudden fluctuations or suspicious transaction patterns should raise red flags.

Deploy an advanced anti-fraud system that can adapt and scale as needed. This system should include not only traditional filters and rules but also the ability to modify rules based on predefined events. By swiftly identifying suspicious activities, such as sudden spikes in turnover or repeated creation of accounts with questionable characteristics, you can suspend transactions for manual review and prevent potential fraud.

Use crypto analytics tools to enhance fraud detection capabilities. These tools can include blacklists of suspicious wallet addresses, visualization of transaction relationships, and scoring models to assess overall transaction risk.