AML4 changes

November 28, 2018 - Announcements

MANGOPAY is in close contact with the local and European banking regulators to offer you a compliant, efficient and seamless solution. As you may know, European laws regarding financial activities is currently evolving and introduce some significant changes that impacts MANGOPAY rules. Those new regulation aim to bring more transparency and security to the end user, as well as more business opportunity.

One of this regulation, The European Union’s Fourth Anti-Money Laundering Directive (AML4) will bring some changes to the user verification process (KYC). Following its transposition, the limits which require a regular verification for Payment Services and the Electronic Money Issuer licence need to be applied without exemption. The amount you are allowed to process without a regular user verification depends on your contract status and country of incorporation.

Please find the new limits below:

COUNTRY PAYMENT SERVICES ELECTRONIC MONEY ISSUER
FRANCE
  • Pay-in/Transfers: no limit
  • Payout: compulsory for any amount
  • Cumulated Payout per calendar month: 250€
  • User balance: 250€
GERMANY
  • Pay-in/Transfers: no limit
  • Payout: compulsory for any amount
  • Cumulated Payout per calendar month: 100€
  • User balance: 100€
REST OF EUROPE
  • Pay-in/Transfers: no limit
  • Payout: compulsory for any amount
  • Cumulated Payout per calendar month: 250€
  • User balance: 250€

As described above, the new regulation sharply lowers the limits for the Electronic Money Issuer licence. We believe this regulation is only the first step in terms of new limits since the AML5 is currently in preparation and is expected to lower the limits further. We strongly advise you to use our Payment Services licence.

To find out which MANGOPAY service you are using, please refer to your contract.

Action required:

As part of the constant improvement of our solution and of your user experience, we have built a new compliance engine. This will bring more transparency to your payment flow while guaranteeing conformity over the coming years. Our new engine might require some technical changes on your side, as MANGOPAY will not enter into direct relationship with buyers anymore.

April to May 2019:

  • MANGOPAY will send you a new contract to update the new KYC limits. By default, you will receive a Payment Services contract.
  • MANGOPAY will send you technical guidance to help you through the changes.
  • Send us back the new contract.

April to October 2019:

  • Align yourself with the new limits. This might include an adaptation of your workflow.

Questions:

What needs to be adapted?

  • If you own a Payment Services contract: No changes are required since the limits remain the same. However, you do need to be aware that we will apply them without exemption. Therefore, proof of identity documents will be required for any user willing to do payouts.

  • If you own an Electronic Money Distributor contract: You will receive a new contract to be able to start using the Payment Services licensor's. This will exempt you from having to request any documents from buyers on your platform. On the flip side, you will have to complete a regular user verification before processing any payout. More info here.

Can I keep an Electronic Money Distributor contract?

Considering the above-mentioned changes in regulation, we do not advise you to use the Electronic Money Distributor contract as it will create friction on your user experience by asking documents to your buyers. However, if your platform deals with C2C and small average baskets, it might be advantageous to use this contract. You will be able to ask for an Electronic Money Distributor contract when you receive your new contract in January.


The Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC


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