Digital Payment Crime Threat and Mitigation Strategies

This guide discusses the various financial crime risks associated with digital payments, particularly focusing on the fintech and regtech sectors. It outlines how digital payments can be exploited for money laundering, fraud, and terrorist financing. The document details specific crime typologies such as transaction laundering, buyer/seller collusion, authorized pushed payment fraud, and synthetic identity fraud, providing examples and statistics to illustrate the prevalence of these issues. Furthermore, it emphasizes the importance of knowing your customer (KYC) and identifying unusual transaction patterns as critical components of risk management. The guide also highlights the role of regulatory technology (regtech) in addressing these challenges, including document verification and transaction monitoring tools. Additionally, it recommends conducting customer risk assessments during onboarding and maintaining ongoing due diligence to identify potential financial crime indicators. The document concludes by listing common red flags that digital payment providers should monitor to mitigate risks effectively.