With many payments becoming available at the click of a button, money launderers are increasingly seeing online payments as an easy way to wash their illicit funds. The size of the problem will only increase, as according to Boston Consulting Group the global payment processing market is expected to nearly double to $2.9 trillion by 2030.

The main challenge for Payment Service Providers (PSPs) is to ensure compliance with the relevant AML standards, whilst ensuring customers receive a professional and efficient service. It is therefore crucial for PSPs to consider all relevant risks and put in place robust AML processes in order to mitigate them before they impact the business.

As the volume, speed, and sophistication of digital payments grow, so will the vulnerabilities faced by PSPs. Regulators were initially seen as slow to react to the scandals and revelations in the sector, but in the last few years, they have strengthened their approach significantly.

Money laundering through PSPs can take many forms. Typical approaches include, blending funds, smurfing (breaking down funds into smaller amounts), invoice fraud, and offshore accounts that hide beneficial owners. These all apply to PSPs; however, two particularly severe threats have been emphasised in recent times – muling and transaction laundering.