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The business of payment processing is actually the business of managing fraud, and everybody tries to lower costs as they grow and age. Unless there’s specific
by colechristensen 4y ago
The business of payment processing is actually the business of managing fraud, and everybody tries to lower costs as they grow and age.
Unless there’s specific external regulation, there’s a regression towards being awful.
- kylecordes 4y agoI wonder if providers like this could offer an option to pay some chunk of money that would cover the cost of a thorough background check and human review of all aspects of your business. They would then be able to trust you enough to not freeze anything without future human intervention.
- colechristensen 4y agoHeh, maybe a regulation saying you couldn’t hold money hostage like this if the business is SOC 2 compliant
- KptMarchewa 4y agoI would guess AML, not fraud.
- maxbond 4y agoI think they're saying there's an inherent ponzenomics to payment processing, wherein the might use AML as an excuse to paper over a lack of liquidity by stalling withdrawals. Lots of cryptoasset exchanges will freeze withdrawals over fictitious security or AML concerns when they're going under, for instance.
- ycombobreaker 4y agoAML regulations are real, though. Crypto exchanges' fictitious claims wouldn't fool anybody if it wasn't already "a thing" in the more-regulated side of the world.
- KptMarchewa 4y agoI haven't seen real example of this in real money financial institutions. Haven't followed crypto exchanges though.
- maxbond 4y agoI'll add that I'm also not aware of something like this happening outside of crypto exchanges & don't actually hold an opinion on this hypothesis, as I'm not familiar enough with payment processors to know one way or the other. My comment makes me sound like I support this hypothesis, but that's a mistake in my wording.