Global Digital Payments, Virtual Currency & Money Laundering Report, 2018

Decode the Legal nuances behind money laundering through cryptos

Report Description

In this time and age of constant evolution of technology, the corporate sector has fundamentally changed the way businesses interact with their consumers. There has been a massive rise in the digital forms of payment. With the growth in digital currencies and a surplus of investment option in payment automation technology, the global economy is rapidly changing, developing and moving towards a more integrated and connected system. According to the Digital Payments, Virtual Currency & Money Laundering Report, 2018 there has been 550 billion non-cash transactions in 2017.


The report has analysed various policies and legal aspects associated with the global digital payment systems and money laundering. The development in digital payment transactions is hugely driven by strong economic growth in key developing nations, improved security measures like biometrics, and government initiatives designed to encourage electronic payments in developing markets. This growth comes as banks face a huge demand for seamless, secure digital services, particularly from corporate customers, spurring transaction banks to accelerate investment and collaboration amongst banks and with Financial technology firms so as to reduce time to market in delivering differentiating digital transaction experiences. The report mentions that there were more than 68 Million POS terminals active in 2017.

According to the analysis of the report, the volume of mobile payment transactions has reached to 72 Billion in 2017.  The cutting-edge technologies are transforming the processing of transactions. With this transformation banking and financial sector have many challenges and risks. Financial technology is providing feasibility to many underdeveloped and developing nations where building a physical banking infrastructure is costly and time taking. Digital payments are catering a more substantial group of people in a very less time. For example, by using digital payment modes the flow of remittances to under developed and developing nations has increased to 466 Billion USD in 2017 from 429 Billion USD in 2016.

The report has emphasized on the fact that every technology has repercussions. Digital platforms are vulnerable to illegal activities and cybercrimes. More than 65% of the total cyber-attacks in financial sector are performed through malware and phishing attacks. In 2017 alone more 144 Million data records were lost from financial institutions.

The regulatory frameworks across the globe are not well equipped to provide the legal recluse to frauds and illegal activities that take place on the internet. There is a vast gap between the policymakers and the industry that is implementing the new technologies. The report has bridged this gap by explaining the policy and international legal frameworks that are applicable to the global payment system. Along with that, the report has elucidated various guidelines and regulatory frameworks that are enacted by BIS, OECD, and EU.

The innovation of Fintech has contributed to the evolution of virtual currencies which are not regulated and controlled by any government authorities. This is the reason why these platforms have encouraged many illegal activities like money laundering. As per the report money laundering activities accounts for 20% of the total financial frauds globally.

The report has mentioned and explained the FATF recommendations that specifically deals with money laundering activities, and how these illegal activities are untraceable on the dark web of the internet.
Amidst all the benefits of fintech, the ill effects are often ignored. This is one of the biggest lacunae of the digital economy. The need of the hour is to strike a balance between technology and regulatory frameworks.

Money laundering activities accounts for 20% of the total Financial Frauds globally

Table of

Contents

Table of Contents

  1. Executive Summary
  2. Analysis of International Laws on Money laundering & Digital Payments
  3. UN Laws            
    1. UNCITRAL Model Law on International Credit Transfer
    2. Obligation of the parties
    3. UNCITRAL Legal Guide on Electronic Funds Transfers
  4. Bank for International Settlements Frameworks
    1. Digital Currencies
    2. Payments Aspect of Financial Inclusion
    3. Non-Banks in Retail Payments          
    4. Guidance on Cyber Resilience for Market Infrastructures     
  5. FATF Recommendations
  6. OECD’s Consumer Policy Guidance on Mobile and Online Payments       
    1. Impact of mobile services on Payment Systems
    2. Issues while performing online transactions
    3. Issues with reference to Collection and use of payment data
    4. Payments security Problems
    5. Transaction uncertainty      
  7. European Union Legal Frameworks
    1. Payment Service Directive   
    2. Payment Service Directive 2
    3. Single Euro Payments Area Regulation (SEPA)          
    4. Cross Border Payment Regulation   
    5. Regulation on interchange fees for card-based payment transaction  
    6. Directive on E-Money 

List of

Graphs

List of Graphs

  1. Distribution of modes of payment through WorldPay(USD  Billion),2016
  2. RTGS Transaction value in USD (Trillion USD), 2011-2015
  3. Number of ATM networks (Million), 2010-2017
  4. Cyber-attack Techniques used in Financial Crimes,2017
  5. Number of e-money accounts (Billion),2010-2015
  6. Number of ATMs Globally(Million), 2010-2017
  7. Number of POS terminals(Million), 2010-2017
  8. Number of POS networks (Million), 2010-2017
  9. Total number of branches of PSPs(Million),2010-2017
  10. Number of PSPs branches of commercial banks(Thousands), 2010-2017
  11. Number of PSPs branches of other deposit-taking institutions(Thousands), 2010-2017
  12. Number of agents of other non-bank PSPs(Thousands), 2010-2017
  13. Types of fraud that financial organisations were a victim of through a cyber-attack,2017
  14. Number of merchants(Million), 2010-2017
  15. Total value of retail payments by Credit Card (Trillion USD),2010-2015
  16. Total value of retail payments by Debit Card (Trillion USD),2010-2015
  17. Value of Direct-Debit Processed (Trillion USD),2010-2015
  18. Credit Card Transaction Through Internet and POS (Billion USD),2010-2015
  19. Use of Debit Card Through Internet and POS(Billion USD),2010-2015
  20. Inflow and Outflow of Remittance(Billion USD), 1976-2016
  21. Credit Transfer Through Different Mediums (Trillion USD), 2010-2015
  22. Total value of Credit Transfer processed (Trillion USD),2010-2015
  23. Growth of Financial Frauds/Economic Crime in Corporates Globally(Percentage), 2001-2018
  24. Most Frequent type of Financial Frauds in Financial Services ,2017
  25. Number of mobile money accounts (Billion),2010-2015
  26. Number of debit cards in circulation (Billion),2010-2015
  27. Number of credit cards in circulation (Billion),2010-2015
  28. Number of card-based e-money accounts (Billion),2010-2015
  29. Financial Institutions which has lost more than 10 Million Data Records,2017
  30. Records lost in Financial Sector (Million) 2005-20017
  31. Region Wise Growth of Financial Fraud Victims, 2016-2018
  32. Value of Cheques Transfers In Europe (Euro Billion),2012-2016
  33. Value of Direct debits Transfer in Europe ( Euro Billion) 2012-2016
  34. Value of Credit transfers in Europe (Euro Billion), 2012-2016
  35. Number of cards issued by resident PSPs in Europe (Millions) ,2012-2016
  36. Value of Transfer through Other payment services in Europe (Euro Billion), 2012-2016
  37. Value of Total card payments in Europe (Euro Trillion),2012-2016
  38. Number of POS terminal in Europe (Million) , 2012-2016
  39. Number of ATMs In Europe (Million), 2012-2016
  40. E-money payments with e-money issued by resident PSPs in Europe (Euro Billion), 2012-2016
     

Countries Analysed

Global Analysis

A Complete Legal Analysis

Laws

Analysed

International, National and Regional Laws

  1. UNCITRAL Model Law on International Credit Transfer
  2. UNCITRAL Legal Guide on Electronic Funds Transfers
  3. BIS Settlement Frameworks
  4. FATF Recommendations
  5. OECD’s Consumer Policy Guidance on Mobile and Online Payments
  6. European Union Legal Frameworks
    1. Payment Service Directive
    2. Payment Service Directive 2
    3. Single Euro Payments Area Regulation (SEPA)
    4. Cross Border Payment Regulation
    5. Regulation on interchange fees for card-based payment transaction
    6. Directive on E-money
       
International, National and Regional Laws

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