Combating the Proliferation of Mobile and Internet Payment Systems as Money Laundering Vehicles

Author: Sean McCrossan, CAMS-FCI

Innovation in products and services related to mobile payments and digital currency has skyrocketed in recent years with no signs of stopping. Consumer adoption appears to be a matter of comfort; baby boomers are now comfortable with accessing financial statements and paying bills online, while their children fund tech startups and purchase digital currency from global exchanges, all from their tablets and smartphones. There is no shortage of mobile applications being developed for sending money or making payments and among the swiftest adopters of these new services are the bad actors seeking obscure avenues to launder illicit funds or finance acts of terror. How can financial institutions (FIs) and financial crimes investigators best position themselves to detect and deter misuse of these new mediums? This paper will discuss the proliferation of Mobile and Internet Payment Systems (MIPS) and the complications they present to banks and financial crimes investigators, as well as recommendations for combating their use as vehicles for money laundering and terrorist financing.

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