Payment giants Visa and Mastercard are conducting more thorough checks if the activity of a potential card Issuer in their systems is related to cryptocurrencies, writes The Block.
Such companies must provide detailed information about their anti-fraud and anti-money laundering methods. Visa's head of cryptocurrency, Kai Sheffield, describes the process as"enhanced discretion beyond what we do for ordinary issuers."
Both Visa and Mastercard have recently been connecting more and more cryptocurrency companies to their services. In July, Wirex wallet provider was the first in the industry to receive full membership status in the Mastercard system. Visa, for its part, has announced an expansion of the Fast Track program to include firms such as Crypto.com and eToro.
"Visa is committed to becoming the preferred network for cryptocurrency wallets,"Sheffield said." Fast Track is the first step for the next generation and a new wave of issuers who want to partner with us and launch card programs from scratch."
However, before joining as an Issuer, the company must convince the payment network that the cryptocurrency that its customers will spend using cards came from reliable sources.
"They are conducting an extended review, basically saying,' I want to see everything you show to your regulators in the context of countering money laundering, '" said Ziglu CEO mark Hipperson, whose company provides services for storing and exchanging cryptocurrencies and recently launched a card in the Mastercard system. According to him, the payment network demanded to disclose information regarding customer identification, fraud and money laundering checks, as well as transaction monitoring.
Wirex CEO Pavel Matveev said that Visa tracks individual transactions using tools from firms such as Chainalysis and Elliptic to make sure that "their origin is legitimate."
"They both ask how we store cryptocurrency, what security measures we use, what our selection policies are, but it's safe to say that Visa goes further. They even ask about certain cryptocurrency transactions, which, frankly, surprises us a lot, " he added.
A Mastercard representative pointed to the principles established in October 2019, according to which partners from the cryptocurrency industry must provide "reliable consumer protection, including the privacy and security of customer information and transactions." According to the company, these principles require "full compliance with all applicable laws and regulations, including those related to anti-money laundering."