Transaction laundering occurs when a fraudster uses a legitimate online merchant account to funnel illegal transactions through a merchant processor, online marketplace or other merchant service provider. The continued growth of online commerce has created more opportunities for illicit players to use legitimate online storefronts to mask their identities, leading to an increase in transaction laundering.
EverCompliant’s research shows that 6%-10% of a merchant service provider’s portfolio has unregistered merchants illegally committing Transaction Laundering, which amounts to nearly USD 500 billion a year worldwide. These transactions may involve illegal goods sold by unregistered merchants, demonstrating that Transaction Laundering fraud is a growing issue for the payments industry.
The companys automated detection solution enable merchant service providers to identify and eliminate unknown and fraudulent merchants. Continual monitoring and verification of third-party identities helps merchant service providers prevent the processing of fraudulent transactions, reducing the risk of chargebacks, financial losses and damage to their reputation.
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