What is transaction monitoring? How payment firms spot suspicious activity
By SendPay Business · · 2 min read
Transaction monitoring is how banks and payment firms watch the money moving through customer accounts to spot activity that could be money laundering, fraud or sanctions breaches. It is a core part of anti-money laundering (AML) rules.
KYC checks who, monitoring checks what
Know your customer (KYC) checks confirm who a customer is when they sign up. Transaction monitoring carries on after that, checking whether what the customer does with their account matches what is expected of them.
Patterns that raise alerts
- Many payments just under a reporting limit.
- Money coming in and going straight back out.
- Sudden large amounts that do not fit the customer's profile.
- Payments to or from high-risk countries or sanctioned people.
What happens after an alert
An analyst reviews the activity and may ask the customer for more information. If the firm still suspects money laundering, it must report it to the authorities. In the UK, that is a suspicious activity report to the National Crime Agency. Firms must not tip the customer off that a report has been made.
Where SendPay fits
Anyone running a money platform needs to meet AML rules. SendPay platforms are powered by licensed partners, and SendPay tells you in writing which licences apply to your platform before you pay.
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This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. PayPal, Patreon and Substack are named as reference points only and are not affiliated with SendPay Business.