PSPs process many transactions everyday, and it’s required for PSPs to ensure legitimacy of parties involved in transactions, hence a proper merchant onboarding processes have to be in place to protect businesses/ individuals using any PSPs from frauds or any money-laundering and illegal activities.
Reserve Bank of India (RBI) has released Guidelines on Regulations of Payment Aggregators and Payment Gateway on 17th March, 2020 to regulate the activities of these payment service providers. KYC / AML guidelines are included in the mandated merchant onboarding process to ensure compliance to Know Your Customer (KYC) / Anti-Money Laundering (AML) / Combating Financing of Terrorism (CFT) guidelines.
The EU member states implemented the Fifth Anti-Money Laundering Directive to tighten the anti-money laundering and terrorist financing regulations towards anonymous issuing of electronic money products in the beginning of 2020; not more than 150 euros can be issued anonymously electronically online, cash redemption amount is limited to 50 euros etc.
PSPs are responsible for ensuring the legitimacy of companies using their services and will not harm any party’s financial conditions or reputation. PSPs have the right to reject providing services to any suspicious business entities. KYC is usually included in the merchant onboarding process of PSPs. Each PSP establishes different KYC policies. During most of the KYC procedures, PSPs will verify certain information of the business/ individual.
PSPs should audit the whole paying processes of its merchants to ensure fast and safe client experience with clear terms and conditions.
he Blockpass Mobile App is able to prove a user’s identity instantly whilst their data remains under their control – allowing them to use it to verify passports, driving licenses or other documentation that particular hospitality services may require. Putting the user in control of their own data whilst keeping it secure will enable a situation where much of the hassle, time, cost and frustration of conveying important but personal documents as they are used to prevent fraud and crime that would otherwise take advantage of the hospitality industry. Future developments will involve adding reputation to users for any manner of reason, allowing them to build up a reputation which has been verified by others – a particularly useful feature as we see an increase in business models where individuals offer services such as with Uber and AirBnB. In addition to this, Blockpass is working with academia to develop groundbreaking data privacy models, which will allow people to prove or verify information without exposing it at all should they wish to keep it private. Through this, Blockpass aims to bring efficiency, speed and privacy to the public and provide a cheap and simple way for the hospitality industry to conduct KYC and verify the identity and credentials of those engaging with their services.