Top 10 Transaction Laundering Resources for Compliance Officers

On: October 10, 2017

Transaction Laundering is an advanced method of money laundering that runs rampant throughout the payments ecosystem. Despite the fact that it’s still below the radar of most KYC and AML professionals, forward-thinking compliance officers are taking it seriously. The reason? Liability. Imagine for a second that the players in the payment ecosystem often unknowingly end up processing payments stemming from criminal activities and funding terror, and let the realization that transaction laundering is money laundering sink in.

Indeed, Transaction Laundering is Money Laundering of the digital age. Simply put, it’s merchant-based fraud that funnels unknown transactions through seemingly-unrelated ecommerce merchant accounts. This enables legitimate websites to act as payment processing storefronts for criminal enterprises selling firearms, illicit drugs, or even financing terror.

As more and more compliance officers turn their attention to Transaction Laundering, here are some prominent resources we’ve found, that you should be monitoring closely:

1. Entrepreneur.com: Online Criminals Are Tricking Entrepreneurs Into Doing Their Dirty Work

Transaction laundering can be used to hijack legitimate merchant accounts without account-holder’s knowledge to launder funds. This in-depth overview describes how affiliates can take advantage of poor vetting and onboarding, and what merchants can do to avoid becoming victims of  this brand-damaging form of money laundering.

2. The PayPers : Transaction Laundering 101

Find out how “acquiring banks can dissolve their unwilling partnership in crime within the hidden networks of nefarious activity” in this in-depth article.

3. International BankerHow Massive is Transaction Laundering? Now We Know…

Quoting recent research, this article offers some startling numbers, notably: “Transaction Laundering for online sales of products and services topped $159 billion in 2016 in the US alone. Of this, some $4.6 billion involved illegal goods, which were sold online by an estimated 100,400 unregistered merchants.”

4. International Banker:  The New Fraud Migrating to Mobile; Transaction Laundering

The proliferation of mobile apps, a lack a standard markup language for deciphering texts and images, and the ease of directing consumers to download apps from non-mainstream stores – all these contribute to the emergence of Transaction Laundering via mobile.

5. Financial Times:  Why transaction laundering is turning into a huge financial blindspot

FT financial blogger Izabella Kaminska offers an explanation about how “anti-money laundering (AML) and know-your-customer (KYC) regulations…may have been entirely ineffective.”

6. PaymentsSource:  Bitcoin crime grabs the headlines, but beware of transaction laundering

Bitcoin and other decentralized, non-fiat virtual currencies are in the headlines as key facilitators of illicit commerce. But its far easier for criminals to abuse the existing payments ecosystem with the help of transaction laundering, argues this article.

 7.FinExtra: Pharma Transaction Laundering Deemed Money Laundering By Courts

Transaction Laundering carries a heavy societal impact, and not just online implications, according to this article. A recent pharma-fraud case, in which and online pharmacy was secretly providing expired or fake HIV medication, is a case in point.

8. Nadja van der Veer:  The New Age of Money Laundering

International payments and compliance expert Nadja van der Veer examines how money-laundering has evolved, and how compliance regimes may not be keeping up.

9. Reuters:  Fake online stores reveal gamblers’ shadow banking system.

Reuters thorough investigation exposes how seven sites, that on the surface sell day to day items  are in reality used as fake storefronts that disguise payments for the $40 billion global online gambling industry.

10. EverCompliant Blog Transaction Laundering is the New, Advanced form of Money Laundering

Our constantly-updated blog is decidedly one of the web’s best Transaction Laundering resources. In this article, we make the case that Transaction Laundering is a “…sophisticated form of money laundering and terrorism financing  and is one of the biggest challenges facing the AML regime today.”

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