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Do these rules apply for a gateway like Authorize.net, or just the banks they communicate with? If so, starting up something like that must be a massive undert

• gm 18y ago
  Financial rules apply to any company that does transactions that could reach a high volume (one of the magic numbers is USD $10,000). So, for example, a car dealership that does single transactions of over $10,000 must comply with several regulations already, including checking the OFAC list (google it) for possible matches of people forbidden to do business with US companies (Believe me, you do NOT want to get caught as the inadvertent money laudering agent for a terrorist organization; your ass is going straight to federal prison even if you did not mean to be their money laundering instrument). You must also check for structured transactions (transfer $20,000 USD in small transactions so they do not go on the radar), etc... The laws are very strict on this nowadays, and people who make themselves be the middleman in a financial transaction are at great risk of getting into trouble if they do not do what they are required to (by the various goverment regulators, both federal and state). I am talking about criminal charges, not just civil penalties. The banks must do their own compliance work, but that does not absolve - in any way - the company that is doing the transactions from doing so as well. It is mostly a cover your ass thing, rather than an "as long as someone in the chain reports it" thing. So yeah, the legal compliance in this business is - vastly - the more complex part of the business. The technology is the easy part.