Becky’s Affiliated: How highly regulated operators can enjoy Bitcoin solutions with Pablo Magro

Becky’s Affiliated: How highly regulated operators can enjoy Bitcoin solutions with Pablo Magro

Last week Payment21, a new Bitcoin cashier system providing AML-compliant cryptocurrency transactions, announced their partnership with Nasdaq-listed payments aggregator ACI Worldwide, a move Paymet21 hopes will shed more light on the solution they can provide for prospective merchants.

According to Payment 21, they are “the first regulated Bitcoin payment processor with a strong focus on the compliance needs of enterprise-level businesses and the legal prerequisites of their banking partners”.

Payment21 claims to have been in the e-commerce business since 2002, starting off as a payments software provider by developing a check scanning solution for online vendors.  Since then, the Swiss company transitioned into a payment services provider and now are a registered financial intermediary.

In 2015, the Bitcoin Cashier System at Payment21 became licensed for e-commerce processing but they kept a low profile until the platform was secure with all regulatory issues straightened out.  Several years later they are ready to hit the ground running and believe highly regulated online gambling companies are a perfect fit for their offering.

“Our approach is to focus on the compliance of each merchant.  The way we work with them is first we meet with each merchant, we see where they are incorporated, we see their regulatory regime, then we talk to their commissions- the gambling commissions in this case- and we also talk to their banking partners”, explained Pablo Magro, Business Development Manager for Paymen21.

“So after we are able to comply it with all the parties, we go ahead and do the integrations and [the merchants] are more comfortable by accepting Bitcoin payments in this way”, he said.

The EU’s Fourth Anti-Money Laundering (AML) Directive was enacted on June 25, 2015 and requires member states to comply by June 26, 2017.  The 4th AML Directive has proven to be one of the most stringent EU law updates in a few years and it’s been a big topic of discussion amongst iGaming operators operating within the EU.

Payment21 built their platform taking into account the requirements of the 4th AML Directive, meaning regulated operators in the EU should be able to enjoy the benefits of transacting in Bitcoin while also complying with EU law.

“We built our platform in order to follow these procedures, through our platform merchants can create form A and form A1 which are banking forms, so through that, the purchaser is able to build a form for the regulators to see.  So that form is already registered in our platform and whenever somebody wants to do an audit, they are able to pull that information”, Magro said.

“One of our strongest points is the KYC check that we do, we have a KYC profiler in which you as a purchaser will have a profile in Payment21 which is going to be there and whenever you do this transaction, your profile is already created in our platform and then the regulators can see the whole history of the transactions, so this is how we’re able to comply”, he added.

While regulators are keen to keep track of the entire history of a customer’s transactions, that customer may not appreciate the gesture, especially if they choose to play using Bitcoin.  Plenty of Bitcoin spenders choose the currency because of its anonymity and there are operators who claim conversion rates are decreased when payments are no longer anonymous.

When asked how prospective merchants react to having to keep track of their customer’s transactions in Bitcoin, Magro emphasized the importance of following regulations and building up the positive reputation of the Bitcoin industry.

“First of all, [operators] need to make sure they are compliant with all the AML laws, so when we tell them these are the procedures to maintain AML compliance, they understand it and would rather do it this way than going around any regulations”, explained Magro.

“We are the ones talking to their banking partners, the ones talking to their gaming commissions, so we understand what they want and our biggest interest is to maintain their compliance for their benefit and also for the Bitcoin industry benefit”, he said.

“If we do something wrong or do something trying to go around these regulations or anything, it only hurts them and the Bitcoin industry, so its not in our interest to do that”, he added.