Bank of Russia highlights signs of shadow business involvement for cards and e-wallets
The regulator has established criteria to help banks detect payment instruments — payment cards and electronic wallets — used by shadow businesses (illegal online casinos, pyramid scams, illegal forex dealers and online cryptocurrency exchange services). The list of criteria is included in the Bank of Russia's Methodological Recommendations.
Shadow business participants receive payments from consumers (individuals using such services) and reverse payments from their controlled bank cards and electronic wallets, often issued for false individuals — not from their settlement accounts. Such payment instruments are not used for everyday purchases, utility payments or other services, but transactions on these cards are unusual by frequency and amount.
To automate the processing of a considerable flow of payments, illegal businesses utilise special software modules that connect to credit institutions’ webpages offering money transfers (P2P services used by responsible individuals for card-to-card / wallet-to-wallet payments, etc.).
The Bank of Russia assumes that remittances to illegal entities are associated with the high risks of losing money and involving individuals in fraudulent schemes. The regulator recommends that credit institutions promptly identify suspicious cards and e-wallets and take anti-legalisation measures against them. Banks should also ensure appropriate protection of P2P services to prevent their use for suspicious transactions.
The measures specified in the document are aimed at protecting consumer interests and reducing suspicious transactions.