What is transaction laundering?

Transaction laundering is a process by which fraudsters disguise themselves as legitimate eCommerce merchants and begin working with an acquirer to process payments. Unbeknownst to the acquirer, the fraudster is actually using their account to launder revenue from criminal activity.

How do you identify transaction laundering?

Transaction laundering can be identified by spotting inconsistent transaction patterns, observing mismatched products or services on a website compared to the transaction details, and detecting sudden, unexplained surges in sales or high-value transactions from a previously low-volume merchant.

What is the difference between money laundering and transaction laundering?

Money laundering is the process of making illegally gained proceeds appear legitimate through a series of financial transactions or manipulations. Transaction laundering, on the other hand, is a digital form of money laundering where illicit merchants process their transactions through seemingly legitimate online merchant accounts.<br><br>Essentially, while money laundering encompasses a broader range of activities, transaction laundering specifically pertains to the misuse of eCommerce platforms to disguise the true nature of goods and services being sold.

How do banks catch money laundering?

Banks employ advanced detection systems, like machine learning algorithms, to analyze transaction patterns and identify suspicious activities. They also adhere to strict Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations, which require them to verify the identities of their clients and report any irregularities. When anomalies are spotted, banks conduct further investigations and, if necessary, report to regulatory authorities for potential legal action.

Chargeback Information | Article Archives

November 18, 2024 | 11 min read

Transaction ID

As a merchant, you process a ton of numbers and information every day. Well, here’s one number you’ll want to remember: your transaction ID number. This article will explain everything you need to know about the transaction ID on your receipts: what it is, why it’s important, and how it could be your secret weapon against chargebacks.

Transaction Process