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The key thing to understand is the difference between the actual law, individual company's implementation of the actual law, individual company's policies that

The key thing to understand is the difference between the actual law, individual company's implementation of the actual law, individual company's policies that have nothing to do with the law and are just a shitty inconvenient business practice, and individual company's representatives that don't know the difference between any of that and just say any inconvenience or transaction limit is because of "anti money laundering compliance" Once you know, there is a lot you can do. But back to the actual law, AML is primarily the creation of a firewall between the physical bearer cash system and the electronic financial system conducted by banks and other financial intermediaries. Anything on the inside of the firewall has already passed AML, meaning that financial institutions and card processors can just assume AML has already occurred. Additionally, inside the firewall, some parts of the electronic financial system can be temporarily ostracized by sanctions. So the only check would be the OFAC list at that point to determine if you can accept payment or not. Compliance for a payment processor has nothing to do with detecting fraud and is pretty much just the OFAC list. So that's the answer. You wouldn't get an idea because there is nothing specific for them to do.

mrtksn 5y ago
> Compliance for a payment processor has nothing to do with detecting fraud and is pretty much just the OFAC list. I suspect that it's not that simple. I did some work for people in compliance, I have some idea on the work they do and it's not simply department of people simply checking against the OFAC list. I'm a bit familiar with banks and not with money processors though. I have seen the bank side of the relationship and they can be very nervous when working with payment processors that bring bad money(scammers, pyramid schemes, drug money, terrorism financing etc). I like the firewall concept but it feels incomplete. Stripe must be doing a lot of interesting work to not be the shady company that the banks don't like working with. If you have more concrete knowledge on the topic, what is the hard part of running money transaction service, I.E. money processor? Atomic book keeping is not the challenge keeping every kid on the block from starting a money processor business, I would guess.
- vmception 5y ago
  on the legal side with the banking regulators that's all it is. the rest is to simplify the likelihood of being part of a department of justice criminal inquiry - not because they did anything wrong, only to prove that they had no part in doing it or having to assist prosecutors and defense. if they just ban customer transactions that don't match their risk matrix, then there isn't data to provide to a prosecutor. outside of that is the relationship with other banks. basically the underlying financial institutions can arbitrarily cut their peers off or be cut off. like you pointed out. I'm still drawing a distinction between voluntary "I think I know what I'm doing" compliance and the mandatory compliance that is pretty clear cut. The result for customers is pretty crappy. None of this anti-money laundering dragnet stuff works and we're the ones burdened with arbitrarily low dollar amount stigmas and limits ($2,000, $10,000) and all the liability. While we occasionally hear about a $2bn decade long money laundering system from a single financial institution dealing drugs with the literal cartel. All to prevent terrorism, which isn't even that expensive. 200,000 9/11's, congratulations everyone. The reality, since apparently nobody actually wants to blow up buildings in the US, is the financial institutions have been tasked with data mining for the state.

mrtksn 5y ago

> Compliance for a payment processor has nothing to do with detecting fraud and is pretty much just the OFAC list. I suspect that it's not that simple. I did some work for people in compliance, I have some idea on the work they do and it's not simply department of people simply checking against the OFAC list. I'm a bit familiar with banks and not with money processors though. I have seen the bank side of the relationship and they can be very nervous when working with payment processors that bring bad money(scammers, pyramid schemes, drug money, terrorism financing etc). I like the firewall concept but it feels incomplete. Stripe must be doing a lot of interesting work to not be the shady company that the banks don't like working with. If you have more concrete knowledge on the topic, what is the hard part of running money transaction service, I.E. money processor? Atomic book keeping is not the challenge keeping every kid on the block from starting a money processor business, I would guess.

vmception 5y ago
on the legal side with the banking regulators that's all it is. the rest is to simplify the likelihood of being part of a department of justice criminal inquiry - not because they did anything wrong, only to prove that they had no part in doing it or having to assist prosecutors and defense. if they just ban customer transactions that don't match their risk matrix, then there isn't data to provide to a prosecutor. outside of that is the relationship with other banks. basically the underlying financial institutions can arbitrarily cut their peers off or be cut off. like you pointed out. I'm still drawing a distinction between voluntary "I think I know what I'm doing" compliance and the mandatory compliance that is pretty clear cut. The result for customers is pretty crappy. None of this anti-money laundering dragnet stuff works and we're the ones burdened with arbitrarily low dollar amount stigmas and limits ($2,000, $10,000) and all the liability. While we occasionally hear about a $2bn decade long money laundering system from a single financial institution dealing drugs with the literal cartel. All to prevent terrorism, which isn't even that expensive. 200,000 9/11's, congratulations everyone. The reality, since apparently nobody actually wants to blow up buildings in the US, is the financial institutions have been tasked with data mining for the state.