Guidance for a Risk-Based Approach to Prepaid Cards, Mobile Payments and Internet-Based Payment Services

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This paper proposes guidance on the risk-based approach to AML/CFT measures and regulation in relation to new payment and product services (NPPS) of prepaid cards, mobile payments and Internet-based payment services, in line with the FATF Recommendations. This Guidance is primarily addressed to public authorities involved in regulation of NPPS (particularly supervisors and policy makers) and private sector institutions involved in the design, development, and provision of NPPS. The purpose of this Guidance is to:

• explain how new payment systems work, who the entities involved in the provision of NPPS are, and their roles/activities
• examine which entities involved in the provision of NPPS are already covered by the FATF Recommendations
• determine the risks involved in the provision of NPPS, including through consideration of any relevant risk factors and risk mitigation measures
• consider the impact of regulation on the NPPS market, including whether such regulation would impact financial inclusion and the positive implications of money deposits moving to regulated financial institutions
• examine how to regulate and supervise entities involved in providing NPPS, and consider the impact of such regulation and supervision on the effective implementation of AML/CFT measures and
• discuss considerations when determining how to apply appropriate AML/CFT regulation of NPPS which addresses the risks, acknowledging that there may be multiple regulated entities.