Businesses initiating cross-border payments are subject to multiple payment regulations in both the originating country and the country in which they land. The costs of non-compliance can be severe, including failed payments, fines, reputational damage and in severe cases, imprisonment. In this white paper you'll learn: About cross-border regulations and why should you care What local regulations and bodies you should know about How to adopt a risk-based approach in order to be compliant What to include in your Risk & Compliance Program checklist

1. THEKEYCOMPLIANCECHALLENGES
BUSINESSESFACEWHENINITIATING
CROSSBORDERPAYMENTS
The Comprehensive GuideWhen
SelectingYour Payment Service Provider
Courtesyof

2. Businesses initiating cross-border payments need to be cognizant of the challenges that
payment regulations pose. Cross-border payments are subject to multiple regulations in
both the originating country and the country in which they land. The costs of
non-compliance can be severe, including failed payments, fines, reputational damage and
in severe cases, imprisonment.
Payment regulations are a moving target in many regions due to the continuing growth of
e-commerce and massive increase in cross-border payment volume. Governments from
theU.S.toChinaarescramblingtomonitorandcontrolthenewmoneyflowsgeneratedby
industry and political disruptions driven by the Internet.
This paper:
Reviews the motivations of governments for regulating cross-border payments
Introduces international bodies that are influential in shaping regulations
Overviews existing and emerging regulations in the U.S. and Europe
Proposes guidelines for a comprehensive risk-based approach for managing compliance
Providesachecklistforevaluatingpaymentprovidersonhowwelltheyaddressglobal
regulatorycompliancechallenges
2TheKeyComplianceChallengesBusinessesFace WhenInitiatingCross-BorderPayments
INTRODUCTION

3. MotivationforRegulatingCross-BorderPayments
InternationalBodiesInvolvedinPaymentsRegulation
RegionalRegulations
UnitedStates
Europe
YourKeyGuidelinesforaRisk-BasedApproachtoCompliance
YourComprehensiveComplianceChecklist
AboutPayoneer
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18-19
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CONTENTS

4. 4
When criminals try to hide or disguise the source of their illegal money by
converting it to funds that appear legitimate, the process is called “money
laundering.”Every year, money launderers try to cover up the illegal source of their
money by funneling billions of dollars through financial institutions. Money
laundering is most likely to be successful when criminals avoid leaving a paper trail
of transactions linking the money back to the crime. Law enforcement can follow
the paper trail created from reports and records of financial institutions. To prevent
money laundering, regulatory authorities typically set strict rules for recordkeeping
and reporting of financial transactions by financial institutions and Payment Service
Providers (PSPs).
ANTIMONEY LAUNDERING (AML)
1MOTIVATION
FORREGULATING
CROSSBORDERPAYMENTS
TheKeyComplianceChallengesBusinessesFace WhenInitiatingCross-BorderPayments
Governments have multiple reasons for regulating cross-border payments. Primary
motivationsincludepreventingmoneylaundering,blockingfundingtoterroristand
criminalorganizations,imposingsanctionsonspecificcountries,controllingcurrency
flowsandothers.

5. Terrorist financing became a critical issue in the United States after the terrorist attacks on
September 11, 2001. The U.S. government passed the USA PATRIOT Act to attempt to
thwart the financing of terrorism and make sure the issue receives adequate focus by U.S.
financial institutions. This act arms U.S. law enforcement with new tools to detect and
prevent terrorism, improving counter-terrorism efforts in significant ways, including:
COUNTERTERRORIST FINANCING (CTF)
TheKeyComplianceChallengesBusinessesFace WhenInitiatingCross-BorderPayments 5
Allowsinvestigatorstousealreadyavailabletoolstoinvestigateorganizedcrimeanddrugtrafficking.
Facilitatesinformationsharingandcooperationamonggovernmentagenciesandremoveslegal
barriers preventing law enforcement, intelligence, and national defense communities from
coordinatingworktoprotectnationalsecurity.
Updatesthelawtoreflectnewtechnologiesandthreats.
Imposes tough new penalties on those who commit and support terrorist operations, both at
homeandabroad.
Forcesnon-U.S.banksdoingbusinesswithU.S.bankstoupgradetheirAML/CTFprocesses.

6. While AML and CTF are often linked in legislation and regulation, terrorist financing
and money laundering are conceptual opposites. Money laundering is the process in
which cash raised from criminal activities is made to look legitimate for
re-integration into the financial system, while terrorist financing cares less about
the source of funds, but more about what funds are being used for, as legally earned
funds may be used to finance terrorism.
Tofacilitatetheapplicationoffinancialsanctions,regulatorshavecompiledconsolidatedlists
ofentitiessubjecttosanctions.Financialinstitutionsareobligedtoretrieveandmaintainthe
most recent copies of these lists, screen payment parties against lists, block attempted
paymentstolistedentitiesorcountriesandtoreportattemptedinfringementtoregulators.
Commonlyappliedsanctionslistsinclude:OFAC(publishedbytheOfficeofForeignAssets
ControltoenforceeconomicandtradesanctionsbasedonU.S.foreignpolicyandnational
security goals); United Nations Security Council Sanctions List (including all individuals
and entities subject to sanctions measures imposed by the UN Security Council); HMT list
(a consolidated list of financial sanctions targets published by the UK treasury).
TheKeyComplianceChallengesBusinessesFace WhenInitiatingCross-BorderPayments 6

7. Typically,
countries that
employ exchange
controls are those
with weaker
economies.
Currency controls are imposed by some governments on the purchase or sale of foreign
currencies by residents or on the purchase/sale of local currency by nonresidents.
Governments put in place currency controls to ban or restrict the amount of foreign
currency or local currency that is allowed to be traded or purchased.
Common foreign exchange controls include: banning the use of foreign currency within a
country; banning locals from possessing foreign currency; restricting currency exchange
to government-approved exchangers; fixed exchange rates; and restrictions on the
amount of currency that may be imported or exported.
Typically, countries that employ exchange controls are those with weaker economies.
These controls allow countries a greater degree of economic stability by limiting the
amount of exchange rate volatility due to currency inflows/outflows. Often, foreign
exchange controls result in the creation of black markets to exchange the controlled
currency for stronger currencies. As such, it is unclear whether governments have the
ability to enact effective exchange controls.
CURRENCY CONTROLS
7

8. Regulations applied by governments to the licensing of PSPs typically address fraud
prevention and consumer protection.These regulations are designed to prevent businesses
that engage in fraud or specified unfair practices from gaining an advantage over
competitors.
Cross border payments facilitated by credit or debit card need to comply with
non-government regulations for fraud prevention established by the Payment Card Industry
(PCI). The Data Security Standard (DSS) is a proprietary information security standard that
organizationshandlingbrandedcardsfromthemajorcardschemesneedtocomplywith.
FRAUD PREVENTION
TheKeyComplianceChallengesBusinessesFace WhenInitiatingCross-BorderPayments 78

9. Regulationstypicallydefinethetypeoforganizationsthatarepermittedtoprovidepayment
services. Traditionally, provision of payment services was restricted to banks, central banks
and government bodies. With the advent of the Internet and proliferation of businesses
providing electronic commerce and payments services, regulatory regimes worldwide have
begun to focus on licensing and regulating smaller PSPs that facilitate various forms of
paymentonline.
InU.S.lawcode,amoneytransmitterormoneytransferserviceisabusinessentity
thatprovidesmoneytransferservices. MoneyTransmittersintheU.S.arepartofalargergroup
of entities called Money Service Businesses or MSBs, which also include currency exchange
firms, prepaid access providers, and check cashers. In Europe the Payment Services Directive
(PSD) defined Electronic Money Institutions, a new category of payment institution
with its own prudential regime. Organizations can apply for authorization as a payment
institution if they meet certain capital and risk management requirements in any EU country
wheretheychoosetobecomeestablishedandthen"passport”paymentservicesintootherEU
member states without additional licensing requirements. In China, the State Administration
of Foreign Exchange (SAFE) seeking to regulate the development of Internet cross-border
payments by payment institutions, and to prevent the risks of cross-border capital flows
through the Internet, allowed non-bank PSPs to participate in the business of payments.This
isthefirsttimethattheChineseStatehaspermittedprivatethird-partypaymententerprisesto
conduct cross-border foreign currency e-business payments directly. SAFE allows payment
institutions in China to obtain a Payment Business Permit issued by the People's Bank of
Chinatoparticipateinapilotcoveringcross-borderforeigncurrencyInternetpayments.
REGULATION OF
PAYMENT SERVICE PROVIDERS
TheKeyComplianceChallengesBusinessesFace WhenInitiatingCross-BorderPayments 9

10. 2INTERNATIONAL
BODIES INVOLVED IN
PAYMENTS REGULATION
Regulations are typically formulated by international organizations whose member
states seek global coordination on matters of trade, finance and enforcement. This
sectionintroducesthevariousinternationalbodiesthatareactiveinrecommending
regulatoryframeworksforpaymentsinindividualcountries.
10
The Financial ActionTask Force (FATF) is an inter-governmental body established in 1989 by the
MinistersofitsMemberjurisdictions. TheobjectivesoftheFATFaretosetstandardsandpromote
effective implementation of legal, regulatory and operational measures for combatting money
laundering,terroristfinancingandotherrelatedthreatstotheintegrityoftheinternationalfinancial
system. TheFATFisa“policy-makingbody”,whichworkstogeneratethenecessarypoliticalwillto
bringaboutnationallegislativeandregulatoryreformsintheseareas.
FATF
TheKeyComplianceChallengesBusinessesFaceWwhenInitiatingCross-BorderPayments

11. 11TheKeyComplianceChallengesBusinessesFace WhenInitiatingCross-BorderPayments
TheFATFlistscountrieshavingstrategicAML/CTF
deficienciesandcallsonitsmemberstoconsider
therisksarisingfromthedeficienciesassociated
witheachjurisdiction.
TheFATFcurrentlycomprises34memberjurisdictionsandtworegionalorganizations,representing
mostmajorfinancialcentersinallpartsoftheglobe.
The FATF has developed a series of recommendations that are recognized as the international
standardforcombatingmoneylaunderingandthefinancingofterrorism.Theserecommendations
formthebasisforaglobalcoordinatedresponsetothreatstotheintegrityofthefinancialsystem.
The FATF has made recommendations regarding AML and CTF, which have become the global
standard that all countries regimes are held to.The FATF published the annual Non-Cooperative
CountriesandTerritories(NCCT)listtomonitorandcoercecountriestoimplementCTFpolicies.NCCT
reports included details of the deficiencies identified regarding countries identified as
non-cooperativeandtheactionstakenbythesecountriestoremedydeficiencies.TheNCCTprocess
endedin2007whenthelastcountrywasdelisted.
Toprotecttheinternationalfinancialsystemfrommoneylaunderingandfinancingofterrorismrisks
andtoencouragegreatercompliancewithAML/CTFstandards,theFATFidentifiedjurisdictionsthat
have strategic deficiencies and works with them to address deficiencies that pose a risk to the
international financial system.The FATF lists countries having strategic AML/CTF deficiencies and
calls on its members to consider the risks arising from the deficiencies associated with each
jurisdiction.

12. The International Monetary Fund (IMF) is an organization of 188 countries, working to
foster global monetary cooperation, secure financial stability, facilitate international
trade, promote high employment and sustainable economic growth, and reduce poverty
aroundtheworld.TheIMFhasaprovisionallowingcountrieswithtransitionaleconomies
toemployforeignexchangecontrols.Countrieswithforeignexchangecontrolsareknown
as "Article 14 countries," after the provision in the IMF agreement allowing exchange
controls for transitional economies. Such controls used to be common in most countries,
particularlypoorerones,untilthe1990swhenfreetradeandglobalizationstartedatrend
towards economic liberalization. Today, countries which still impose exchange controls
are the exception rather than the rule.
IMF
TheWorldTrade Organization (WTO) is an intergovernmental organization that regulates
international trade. The WTO General Agreement on Trade in Services and its Annex on
Financial Services provide the international legal framework for the regulation of
cross-border trade in financial services. The most important elements of the WTO
commitments on financial services pertain to nondiscrimination and national treatment,
meaning that if you accept opening your market, you may not apply different regulations
to banks from different foreign countries than to your local banks. Open trade in financial
services does not mean greater risk to the system’s safety and soundness.
WTO
12TheKeyComplianceChallengesBusinessesFace WhenInitiatingCross-BorderPayments

13. TheKeyComplianceChallengesBusinessesFace WhenInitiatingCross-BorderPayments 13
The PCI Standard is mandated by the card brands and
administeredbythePaymentCardIndustrySecurityStandards
Council, the standard was created to increase controls around
cardholderdatatoreducecreditcardfraudviaitsexposure.
The Payment Card Industry Data Security Standard (PCI DSS) is a proprietary information
security standard for organizations that handle branded credit cards from major card
schemes including Visa, MasterCard, American Express, Discover, and JCB. The PCI
Standardismandated by the card brandsandadministeredbythePaymentCardIndustry
Security Standards Council, the standard was created to increase controls around
cardholder data to reduce credit card fraud via its exposure. Validation of compliance is
performed annually, either by an external Qualified Security Assessor that creates a
Report on Compliance for organizations handling large volumes of transactions, or by
Self-Assessment Questionnaire for companies handling smaller volumes.
The PCI Data Security Standard specifies 12 requirements for compliance, organized into
six logically related groups called "control objectives”.
PCI

14. PaymentregulationsintheU.S.aretightlyalignedwiththeFATF.FinCENisthegovernmentbody
charged with administering AML/CTF regulations. Bank and non-bank financial institutions are
required to abide by anti-money laundering rules stipulated in the Bank Secrecy Act and USA
PATRIOTActandtoscreencustomersandtransactionsagainstsanctionslistsmaintainedbyOFAC.
UNITED STATES
The Financial Crimes Enforcement Network was established in 1990 by the U.S. Congress as a
bureau within the Treasury Department. FinCEN’s duties and powers include: maintaining
government-wide data access to financial transaction information; analyzing and disseminating
informationtosupportlawenforcement;determiningemergingtrendsinmoneylaunderingand
financialcrimes;andcarryingoutdelegatedregulatoryresponsibilities.FinCENdefinesitsmissionas
safeguardingthefinancialsystemfromillicituseandcombattingmoneylaunderingandpromoting
national security through the collection, analysis, and dissemination of financial intelligence and
strategic use of financial authorities. FinCEN governs federal regulation of Money Services
Businesses. FinCEN requires registration making it a felony to engage in money transmission
withoutalicenseinanystatethatrequiresalicensetooperate.
FinCEN
14TheKeyComplianceChallengesBusinessesFace WhenInitiatingCross-BorderPayments
3Whileeachcountryregulatescross-borderpaymentsdifferentlyaccordingtoregional
requirements and legal infrastructure, most follow guidelines and best practices
promotedbyFATFandotherinternationalbodies.Thissectiondescribes regulationsin
theUSandEurope.
REGIONALREGULATIONS

15. Internet and mobile-based payment services are
required to seek a state money transmitter license if
they offer services to individuals residing in the state.
Forty-eight U.S. states regulate MoneyTransmitters with laws varying from state to state. Most
states require Transmitters to provide a surety bond of between $25,000 and $1 million and
maintain a minimum capital requirement. Internet and mobile-based payment services are
requiredtoseekastatemoneytransmitterlicenseiftheyofferservicestoindividualsresidinginthe
state. Under the Dodd-Frank Act (2012), the Consumer Financial Protection Bureau (CFPB)
extended state regulation under a "Remittance Rule" that added additional protection for U.S.
consumers sending money electronically to foreign countries. The rule targets MSBs providing
consumer-to-consumer transfers of low monetary value to businesses and individuals in foreign
countries.
State Regulation of MoneyTransmitters
TheBankSecrecyAct(BSA)wasenactedbyCongressin1970tofightmoneylaunderingand
otherfinancialcrimes.TheBSArequiresfinancialinstitutionstocreate“papertrails”bykeeping
records and filing reports on certain transactions. Reports are submitted to FinCEN, who
collects and analyzes the information to support law enforcement and provide policy makers
with strategic analyses of money laundering developments, trends and patterns. The BSA
governsnotjustbanks,butalsoMSBs. TheBSArequiresMoneyServiceBusinesses(MSBs)to
register.IfanMSBknowsorsuspectsthatanytransactionoractivityissuspiciousitmustfilea
SAR.MSBsarerequiredtodevelopandimplementanAMLcomplianceprogram. MSBsmust
file a CTR for transactions exceeding a threshold with the same customer in a day. MSBs are
requiredtokeeparecordofcertaintypesoftransactions.
Bank Secrecy Act
15TheKeyComplianceChallengesBusinessesFace WhenInitiatingCross-BorderPayments

16. Structuring involves
designing a
transaction to evade
triggering a reporting
or recordkeeping
requirement.
Suspiciousactivityincludesanyconductedorattemptedtransactionorpatternoftransactions
known, or suspected of meeting any of the following conditions: involves money from criminal
activity; is designed to evade BSA requirements, whether through structuring or other means;
appears to serve no business or other legal purpose and for which available facts provide no
reasonableexplanation;involvesuseoftheMSBtofacilitatecriminalactivity.
Structuring involves designing a transaction to evade triggering a reporting or recordkeeping
requirement. Structuring is a federal crime, and must be reported by filing a Suspicious Activity
Report(SAR).Examplesofstructuringinclude:Aclientbreakingalargetransactionintotwoormore
smaller transactions; a large transaction that is broken into two or more smaller transactions
conductedbytwoormorepeople.
There are a number of possible factors, or red flags, which signal that an activity or transaction
mightbesuspicious.Examplesof“redflags”include:customerusingfakeID;twoormorecustomers
using similar IDs; customer changing a transaction after learning that he or she must show ID;
customer conducting transactions so that they fall just below amounts that require reporting or
recordkeeping;twoormorecustomers,tryingtoevadeBSArequirements,thatseemtobeworking
togethertobreakonetransactionintotwoormoretransactions.
GuidelinesforFinancialInstitutionstoDetectMoneyLaundering
16

17. The Office of Foreign Assets Control (OFAC) is part of the U.S. Department of theTreasury which
administersandenforceseconomicandtradesanctionsbasedonU.S.foreignpolicyandnational
security goals against targeted foreign countries and regimes, terrorists, international narcotics
traffickers,thoseengagedinactivitiesrelatedtotheproliferationofweaponsofmassdestruction,
andotherthreatstothenationalsecurity,foreignpolicyoreconomyoftheUnitedStates.OFACacts
under Presidential national emergency powers and authority granted by legislation, to impose
controlsontransactionsandfreezeassetsunderU.S.jurisdiction.Manyofthesanctionsarebasedon
United Nations and other international mandates, are multilateral in scope, and involve close
cooperationwithalliedgovernments.
OFACpublishestheSpeciallyDesignatedNationalsList(SDN)aspartofitsenforcementefforts.The
listincludesindividualsandcompaniesownedorcontrolledby,oractingfororonbehalfof,targeted
countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers
designated under programs that are not country-specific. Collectively, such individuals and
companiesarecalled"SpeciallyDesignatedNationals"or"SDNs."TheirassetsareblockedandU.S.
personsaregenerallyprohibitedfromdealingwiththem.PSPsthatinitiatepaymentsintheU.S.are
requiredtoscreenbeneficiariesagainstthislistandtoblockpaymentstolistedentities.
OFAC administers a number of different sanctions programs against countries. Sanctions can
be either comprehensive or selective, using the blocking of assets and trade restrictions to
accomplish foreign policy and national security goals. Sanctions programs currently
administered by OFAC include: Cuba Sanctions; Ukraine-/Russia-related Sanctions; Iran
Sanctions;SyriaSanctions;CounterTerrorismSanctions;andCounterNarcoticsSanctions.
OFACpublishestheSectoralSanctionsIdentifications(SSI)Listtoidentifypersonsoperatingin
sectors of the Russian economy identified by the Secretary of the Treasury pursuant to
ExecutiveOrder13662.Directivesfoundwithinthelistdescribeprohibitionsondealingswith
thepersonsidentified.
OFAC
17TheKeyComplianceChallengesBusinessesFace WhenInitiatingCross-BorderPayments

18. The EMD defines rules for conducting business and supervising electronic money institutions with the aim of
contributing to the emergence of a single European market for electronic money services. Electronic money is
definedasadigitalequivalentofcash,storedonanelectronicdeviceorremotelyataserver.
TheEMDaimstoenablenew,innovativeandsecureelectronicmoneyservicestobedesigned;providemarket
access to new companies; and foster competition between all market participants. The directive focuses on
modernizingEUrulesonelectronicmoney,anddefinestheprudentialregimeforElectronicMoneyInstitutions.
TheEMDdefinestherulesforlicensingandsupervisionofElectronicMoneyInstitutionsinordertoguaranteefair
competitionconditionsforallpaymentserviceproviders.
ElectronicMoneyInstitutionsmustobtainauthorizationfromaMemberStatetocarryoutactivitiesrelatedtothe
provisionofpaymentservices.AlicensetooperateasanElectronicMoneyInstitutionobtainedinanyEuropean
statecanbepassportedthroughouttheentireEU.
ElectronicmoneyinstitutionsmustholdinitialcapitalofnotlessthanEUR350000andholdownfundswhichshall
becomposedmainlyofcapitalreserves.Fortheactivityofissuingelectronicmoney,ownfundsshallamounttoat
least two percent of the average outstanding electronic money. Electronic money institutions must safeguard
fundsthathavebeenreceivedinexchangefortheelectronicmoneyissued.Thesesafeguardsmustbeeffectiveno
laterthanfivebusinessdaysaftertheissuanceofelectronicmoney.Electronicmoneyissuersarerequiredtoissue
electronicmoneyatparvalueonthereceiptoffunds.Uponrequestbytheelectronicmoneyholder,issuersmust
beabletoredeemthemonetaryvalueoftheelectronicmoneyheldatanymoment.Redemptionconditionsshall
beclearlyestablishedinthecontractbetweentheissuerandtheholderofelectronicmoney.Redemptionmaybe
subjecttoafeeonlyifstatedinthecontractinspecificcases.
Payment regulations in Europe are aligned with the FATF. The European Parliament has issued
directives aiming to establish a modern and comprehensive set of rules for regulating payment
servicesandcreatinganEU-widesinglemarketforpayments.
EMD - E-Money Directive (2009/110/EC)
18TheKeyComplianceChallengesBusinessesFace WhenInitiatingCross-BorderPayments
EUROPE

19. 19
Electronic Money
Institutions must obtain
authorization from a
Member State to carry
out activities related to
the provision of
payment services.
The Directive on Payment Services (PSD) provides the legal foundation for the creation of an
EU-widesinglemarketforpayments.ThePSDaimsatestablishingamodernandcomprehensive
set of rules applicable to all payment services in the European Union. The target is to make
cross-borderpaymentsaseasy,efficientandsecureas'national'paymentswithinaMemberState.
ThePSDalsoseekstoimprovecompetitionbyopeninguppaymentmarketstonewentrants,thus
fostering greater efficiency and cost-reduction. At the same time the Directive provides the
necessarylegalplatformfortheSingleEuroPaymentsArea(SEPA).
PSD-DirectiveonPaymentServices
The Payment Services Directive (PSD2) will replace the existing PSD in 2017. It will have a wider
scopetocoverthenewpaymentservicescreatedbyinnovationinfinancialservices.ThePSD2will
increase focus by regulators on consumer protection and promote development of a unified
paymentservicessectorthatbetterfosterscompetition,innovationandsecurity.
PaymentsLegislativePackage(PSD2)

20. To mitigate compliance and fraud risks, a comprehensive compliance program should
include risk management, fraud monitoring and robust investigation processes.
Applications for boarding financial accounts should be automatically screened against
multiple risk-based criteria. Red flags raised should be manually reviewed by dedicated
personnel trained to identify potentially fraudulent account applications.
Disbursements should be automatically monitored, leveraging proprietary data and third
party tools such as IP Geo-location, PC Fingerprints, RSA Adaptive Authentication and
others to identify potential fraud.
20TheKeyComplianceChallengesBusinessesFace WhenInitiatingCross-BorderPayments
4YOURKEYGUIDELINESFOR
ARISKBASEDAPPROACH
TOCOMPLIANCE

21. 21
Red flags should trigger manual investigations that include link analysis, review of
transactionactivity,webactivityandinformationaboutactivitiesfrompartiesidentifiedas
being related to the incident. Suspicious activity reports (SARs) should be filed as deemed
appropriate pursuant to the AML/CTF Program.
Multiple layers of risk technology should be deployed alongside procedures to protect
customers and the platform against different fraud and compliance scenarios including
registration fraud, account takeover and others. Procedures should be deployed at multiple
technology layers including:
DeviceTaggingandDataEnrichment
IdentityVerificationandAccountProtection
Analytics&Monitoring
ManagementandBusinessProcesses
PerimeterProtection
A comprehensive compliance program should
include risk management, fraud monitoring and
robust investigation processes.

22. 22TheKeyComplianceChallengesBusinessesFace WhenInitiatingCross-BorderPayments
5YOUR COMPREHENSIVE
COMPLIANCE CHECKLIST
IsthePSPregisteredintheU.S.asaMoneyServiceBusinessandlicensedasaMoneyTransmitterintheStatesin
whichlicensingisrequired?
DoesthePSPholdapaymentinstitutionore-moneylicenseinEurope?
ArethePSPanditspaymentpartnersregulatedandlicensedinthecountriesthatfundsaredisbursedtopayees?
Licenses
Does the PSP administer a robust KYC program that is audited regularly by third parties?
KnowYour Customer (KYC)
Does the PSP actively monitor transaction activity of customers for unusual or suspicious activity
and report on red flags that are uncovered?
Have PSP’s employees been trained to recognize activity indicative of money laundering, terrorist
financing or other criminal activity.
Transaction Monitoring and Reporting
Is the PSP audited regularly to maintain licenses and relationships with banking partners?
Are audit reports available for inspection?
Audit
Transactions occurring in certain countries can pose higher AML/CTF risk due to less stringent AML/CTF
regulations,laxprivacylawsorprevalenceofdrugtrafficking,corruption,orfinancialcrimeinthesecountries.
DoesthePSPapplyacountryriskevaluatortoassessgeographicrisk?
Geographic Risk
DoesthePSPhaveastrongAnti-MoneyLaunderingandCombattingTerroristFinancing(AML/CTF)program
thatisregularlytested,auditedandreviewed?
AML/CTF
Does the PSP screen all transactions against OFAC and other country relevant lists to prevent payments to
sanctionedentities?
DoesthePSPregularlyretrieveupdatedsanctionlistsandre-screenpartiesincasesofupdatestothelists?
Sanctions Screening
When selecting a Payment Service Provider verify that they adequately address
thefollowingcompliancechallenges:

23. Payoneer was created to provide businesses around the world with faster, easier, cheaper and
compliant payments to global payees. We facilitate payment of billions of dollars annually by
thousands of leading platforms like Airbnb, Elance, Fiverr, Getty Images and Google to millions of
beneficiaries in over 200 countries. Payoneer processed over one million applications in 2014 from
beneficiaries across the world seeking to get paid.
Payoneer offers multiple international payment methods including local bank transfers, international
wires,prepaidcards,Payoneeraccounts,andlocalcurrencycheckstoenablebeneficiariesanywhereto
get paid easily. The company works with a network of banks and regulated non-bank payment
partners to deliver payments around the world. Payoneer is registered in the U.S. as a Money Service
Business and licensed as a Money Transmitter. In Europe, Payoneer has an e-money license through
Payoneer EU, a wholly-owned subsidiary.
By working with Payoneer on cross-border payments, you will immediately benefit from a
comprehensive choice of payment methods, wide geographical coverage, robust compliance and
Payoneer’s payment-savvy Account Managers that will assist you to apply payment methods that are
most applicable for your business scenarios and geographical requirements, while ensuring low
transaction costs, robust, fast clearance, strong security, finality, flexible tracking, superior
multi-lingual customer services and complete regulatory compliance.
Payoneer removes geographical borders for payers and payees and ensures smooth, regulatory
compliant, cost-effective and secure payments.
HAVE PAYONEER CARRYTHE COMPLIANCE BURDEN
OF CROSSBORDER PAYMENTS FORYOU.
TraditionalCross-BorderPaymentsTraditionalCross-BorderPaymentsAboutPayoneer 23
ABOUT PAYONEER

24. ©2005-2015Payoneer;AllRightsReserved.
Thispublicationisforinformationalpurposesonlyandisnotintendedtoprovideanyprofessionalorbusinessadvice.Althoughtheinformation
providedinthepublicationisintendedtobecurrentandaccurate,nowarrantieswhatsoeveraremadeinrespecttoit. Payoneerisnotresponsible
foranyerrorsoromissionsinthecontentofthepublicationandnoentityorpersonatPayoneerisliableforanylossessufferedbyanypersonor
entitythatreliesonthispublication.
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