Money laundering is an illegal process that criminals use to cover up the origin of the money acquired from illegal businesses and make the funds look legitimate. This is done by dividing the large amount of cash into smaller amounts and deposit into bank accounts. Later the criminals will engage into fake investments or buy and sell activities to move the funds through different channels; thus giving them a legitimate appearance.

Electronic payments became very attractive to criminal activity since they provide the ability to transfer large amounts of money within few clicks. Anonymity is very important in money laundering therefore criminals tend to use the systems that requires minimum personal information.

In order to mitigate the risk of using QuidLink Social Payment System for money laundering, QuidLink should follow the AML (Anti Money Laundering) regulations. Moreover the following considerations will be used:

• Keep record of all transactions.
• Set limits on accounts, frequency of use and amount transferred within a certain time.
• Monitor transaction flows on system level.

These last two features complement each other since setting limits will force criminals to split the transaction into smaller ones, which will be detected by monitoring service.

Resources:

FATF. (2010). Money Laundering Using New Payment Methods. Retrieved From: http://www.fatf-gafi.org/media/fatf/documents/reports/ML%20using%20New%20Payment%20Methods.pdf

Sowmya Nadig, Anand Murthy. (2013). Anti-money laundering principles for alternate payment methods. Retrieved From: http://www.infosys.com/industries/financial-services/white-papers/Documents/anti-money-laundering-principles.pdf

Anti-Money Laundering. http://www.lawsociety.org.uk/advice/practice-notes/aml/