Regulatory Requirements

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Many companies negotiate contracts containing merchant of record designations without fully appreciating the significance of that designation from a privacy and data security perspective.

For purposes of this article, the merchant of record is the party that both contracts directly with the payment processor and holds the direct consumer relationship for the transaction. The MoR is the business the consumer knows, interacts with, and sees on the cardholder billing statement. This is the traditional direct-merchant model, distinct from platform arrangements…
Continue Reading The Merchant of Record (MoR) Designation Has Significant Privacy and Data Security Implications

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In the payments world, commentators note Illinois’ recent Interchange Fee Prohibition Act, which prohibits charging interchange fees on the tax or tip portions of processed transactions.

Key portions of the law take effect July 1.

By its terms, the Interchange Fee Prohibition Act also contains a general privacy rule restricting the use of payments transactional data:

(b) An entity, other than the merchant, involved in facilitating or processing an electronic payment transaction, including, but not limited to, an issuer…

Continue Reading Payments and Privacy – What Issues Should Payment Service Providers Be Paying Attention To?

Chicago Federal Reserve Bank Building
Joshua Woroniecki, Unsplash

On January 19, 2021, several federal banking regulators including FinCEN, the Federal Reserve, the FDIC, NCUA, and the OCC jointly issued answers to several frequently asked questions (FAQs) regarding suspicious activity reports (SARs) and other anti-money laundering (AML) considerations for financial institutions covered by SAR rules.  As used below, the term “financial institution” includes money services businesses.

Importantly, the FAQs do not alter existing BSA/AML legal or regulatory requirements, nor do they establish new supervisory expectations.  Instead, they are intended to clarify the regulatory requirements related to SARs to assist financial institutions with their compliance obligations.
Continue Reading New Joint Regulatory FAQs Regarding Suspicious Activity Reporting and other AML Considerations