Moving money across borders is extremely complex. Without the proper safeguards, this complexity can be easily exploited by criminals looking to disguise illegal financial transactions. We take very seriously our responsibility to the people behind every payment to ensure the financial system is not used to facilitate harm.
Flywire has built our entire business around solving hard problems at scale, guided by a deep respect for the importance of safeguarding global transactions. At the same time, we’ve masked the complexity in cross-border receivables – baking currency conversion, new payment methods, regulatory frameworks and more into our technology – so you can trust that it is all taken care of.
I’ve been building global payments systems for decades, and I think this is the most complex global financial ecosystem I have ever seen. Based on all the work I’m doing as part of the PCI Board of Advisors, that is the consensus among my peers as well.
But it is not keeping me up. As a licensed payments company that is publicly-traded, we have built a fortress to keep bad actors out of every transaction, helping to flag and do our part in preventing the global financial system from being used by criminals, drug traffickers, for child sexual exploitation, and by terrorist organizations.
What does it look like, and why should travel businesses care about having these protections behind your payments? Let me peel back the layers and explain.
The responsibility involved in moving cross-border payments
The baseline of money movement is making sure the transaction itself is secure – which requires compliance with things like PCI DSS, best-in-class application and vendor security, threat monitoring, incident response and more.
We know that travelers care deeply about payment security (71% of 500+ luxury travelers just surveyed said they’re concerned about it). Their unease impacts their loyalty to travel businesses.
But beyond transaction security, cross-border payments providers also have a responsibility to guard against the global financial system being used for harm.
What does a solid AML/CTF function look like?
To protect the financial system from criminal exploitation, companies like Flywire have a dedicated compliance and risk management function. Our function has board-level oversight.
Broadly speaking, there are three parts of a strong Anti-Finance Crime and Fraud Monitoring program. Each part is subject to audit and review by independent reviewers, our financial institution partners and regulators.
Know Your Customer (KYC) processes: To provide you and your customers with safe, broad access to our payment and currency services, Flywire, like all regulated payments companies, must verify the legal standing and corporate structure of your business as well as the nature of your business and your anticipated payment activity. Our KYC process aims to effectively and thoroughly determine who our clients are, a requirement of global financial regulators and our banking and financial institution partners.
AML/CTF program. U.S. laws and other global regulations (collectively, the “AML Laws”) require financial institutions to identify and report potential money-laundering activities, terrorist financing, sanctions “true matches,” illegal activities, and certain other suspicious transactions conducted by or through the business. The AML laws also require Flywire entities to make and retain certain records regarding customers, transactions and accounts. Flywire has implemented the standards set forth by the Financial Action Task Force (“FATF”) in each of the jurisdictions in which the company operates, along with any local standards that go beyond the FATF standards.
Suspicious Transaction Monitoring and filing Suspicious Activity Reports. A dedicated compliance function (that has decades of experience in the space) monitors and adjusts customizable rule workflow to defend against bad actors. Each payment and user is assessed and given a risk score. Based on that risk score, the tool will auto-reject, auto-pass, or send payments for manual review by our team of analysts. This combination of technology and people helps us monitor against a variety of risk factors.
Travel businesses have always been a force for good
Travel businesses contribute a tremendous amount to the global economy. Travel and Tourism represents 10% of the global economy, with 1 in 10 jobs globally representing employment in the industry. In many cases local communities are reliant on the travel businesses in their midst, on the money that is spent by travelers on experiences, in hotels and more, to flow into the local economy.
The right payment provider deeply understands the importance of what you do – and has the governance, systems and expertise in place to ensure there are no distractions.
