Anonymity |
Using stolen or fake identification to open a BNPL account |
This makes it difficult to accurately identify and verify the account holder |
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CUSTOMER |
Multiple accounts |
Opening accounts with several BNPL providers , conducting numerous small transactions |
This “ smurfing ” technique allows them to distribute their illicit activities across several platforms |
High-risk industries or occupations |
Customer in a cash-intensive business ( e . g ., casino ) uses BNPL to launder illicit proceeds |
Customers in high-risk industries or occupations may make a series of small transactions to hide the source of funds |
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PRODUCT AND SERVICE |
Digital nature
Rapid credit
Short repayment
|
Using a VPN and fake digital identity to conduct illicit transactions
Using newly obtained BNPL credit to buy and sell items , repaying debt before detection
Opening multiple BNPL accounts with short repayment cycles to obscure suspicious patterns
|
The digital nature of BNPL makes it easier to exploit technology to hide the origin of activity and remain anonymous
The short time frame between obtaining credit and repayment makes it difficult to identify and investigate suspicious activity
By distributing illicit activities across several providers and rapidly repaying debt , criminals can reduce the chances of being flagged for suspicious behavior
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High volume |
Initiating multiple small transactions in order to blend illicit funds with legitimate ones |
A high volume of transactions obscures any single illicit transaction , making it challenging to detect money laundering activities |
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TRANSACTIONS |
High velocity
Cross-border
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Moving funds rapidly between various BNPL accounts
Transferring funds from a high-risk jurisdiction to a low-risk jurisdiction
|
High velocity of transactions makes it difficult to identify and investigate suspicious patterns , hindering detection efforts
By moving funds across borders , criminals can take advantage of weaker regulations in certain jurisdictions
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GEOGRAPHY |
High-risk jurisdictions |
A BNPL provider enters a country with weak AML regulations , inadvertently enabling money laundering schemes |
BNPL providers that expand into jurisdictions with weak AML regulations face increased risks of money laundering |