KYC: who is behind your customers?

KYC (= Know your Customer) and KYB (= Know your Business) form the basis for enrolling a customer for any payment service, be it an individual or a business. This is the procedure for verifying the identity of an individual or all of the constituents of a company (its legal representatives, its articles of association, etc.), and assessing the risks inherent in providing it with information. payment services. This verification aims to be in compliance with the AML law (Anti-Money Laundering Laws) punishing crimes, fraud and financial offenses, in particular corruption or the financing of terrorism.

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KYC: who is behind your customers?

KYC (= Know your Customer) and KYB (= Know your Business) form the basis for enrolling a customer for any payment service, be it an individual or a business. This is the procedure for verifying the identity of an individual or all of the constituents of a company (its legal representatives, its articles of association, etc.), and assessing the risks inherent in providing it with information. payment services. This verification aims to be in compliance with the AML law (Anti-Money Laundering Laws) punishing crimes, fraud and financial offenses, in particular corruption or the financing of terrorism.

Read More...

KYC: who is behind your customers?

KYC (= Know your Customer) and KYB (= Know your Business) form the basis for enrolling a customer for any payment service, be it an individual or a business. This is the procedure for verifying the identity of an individual or all of the constituents of a company (its legal representatives, its articles of association, etc.), and assessing the risks inherent in providing it with information. payment services. This verification aims to be in compliance with the AML law (Anti-Money Laundering Laws) punishing crimes, fraud and financial offenses, in particular corruption or the financing of terrorism.

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Has your child grown up and you want to give him some pocket money? You want to introduce him to managing a budget, teach him the value of money and things, but also allow him to have money at all times when needed. Pocket money is also a way for him to show his independence in front of you and to meet his daily expenses on his own, a cinema with friends, transport, a meal, clothes… It is also a good way to show him that he is no longer a child and to empower him.

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Each year, expense reports represent more than 30 billion euros for companies. According to an analysis report by Oversight Systems, a company loses 5% of its revenue each year due to fraud; 89% of this loss is linked to expense reimbursements! In addition to a significant loss of income, the automation of these expenses for the company is not commonplace since today, 59% of employees would not be equipped with an expense report software ( knowing that on average, it takes an employee 27 minutes to complete a note: a considerable loss of working time and therefore productivity for companies).

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PSD2 in brief

DSP2, you have surely heard about it in recent months. Entered into practice on September 14, 2019, the new version of the European Directive on Payment Services (PSD2) is at the heart of banking and commercial news. However, it does not date from yesterday. Adopted in November 2015, its “big sister” (or DSP1) dates from 2007.

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The virtual card is essential today in the banking world and especially that of neo-banks as the fashionable means of payment. The increase in fraud on card payment transactions, which jumped 13.4% in 2018 alone, is undoubtedly not for nothing. Both individuals and professionals are seduced by this new trend which offers much more than a simple payment card ...

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Open banking in a word

This new expression describes banks sharing certain data of their customers with other actors of the financial world under certain conditions but also non-personal data relating to the banks themselves (ex: locations agencies, services provided etc.). The very principle of an open banking system suggests apprehensions as the notions of security and protection until then provided the "guarantee" of a well-kept money.

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83% of French people do not know what Fintech is and yet ...

For this article, we might as well start at the beginning: what is a FinTech? This word is the contraction of the words "Financial" and "Technology". Invented by our Anglo-Saxon friends, it can be translated into French as “Financial Technology”.… But still?

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What is a closed loop payment card?

The "Closed Loop" is an anglicism widely used in development to evoke a system literally designed in "closed circuit". Often designed to be self-contained, closed circuits are processes which aim to reduce outside interference. In the field of payment cards and more particularly prepaid cards, the indication "closed loop" determines a restricted field of use. In fact, unlike an "open loop" payment card which can be used on an open and multi-brand network (this is also the case for most bank cards); a “closed loop” card will be limited. For example, it can only be used in a particular store, or only within a group of brands.

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What is a Program Manager in the Fintech market? What is a company that does the Programme Management in the financial sector?

10 years ago, new players appeared with the introduction of the new status of electronic money institution (EME) in Europe. The new concept of « Programme Manager » emerged. The new European directive (reinforced by the reform of the single market for payments in euros) authorizes the issuance of electronic money without the need for bank support. Providing payment services then becomes accessible for organizations that are not banks. As a result, companies obtain regulated statuses and can issue means of payment, such as prepaid cards, under certain conditions. This opens up an ocean of possibilities.
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But before talking about Program Management or Program Management, let's talk about program.
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Finally, what is a payment program/programme?

Let’s take the simplest example: rechargeable payment cards or prepaid cards which have seen their use explode in Europe. A card programme includes:

  • The issuance of electronic means of payment on the basis of a BIN number (Bank Identification Number: the reference code of the issuing account which can be seen on the first 6 digits of your card code). A BIN Sponsor intervenes here, which is an establishment with the regulated status of issuing electronic money, it may be a bank or any other similar organization.

  • The processing of payments includes operations and transactions between payer / paid / and payment medium: the organization managing this part is called a Processor

  • A payment network or more commonly referred to as a "Card Scheme" is the most well-known part of the system since it concerns global networks such as Visa, Mastercard, CB, Union Pay or American Express. Network members (especially merchants) accept payments within one or more networks.

  • A Bureau: quite simply the manufacturer who encodes and personalizes the means of payment. For example for the card: usually plastic, it is produced according to strict standards, from the chip to the numbers through to the magnetic strip. New Bureau are offering more and more original payment media such as metal or ceramic cards but also wearables such as connected jewelry).

  • A supervisory authority: in France, it is the ACPR (prudential control and resolution authority) which plays the role of regulator. This organization backed by the Banque de France supervises the activity with the aim of protecting users and ensuring the stability of the financial system. *A trust account is an account managed by an independent and trusted third party that allows money to be processed on behalf of another person or entity. It is often the banking institution represented by the Bin Sponsor that manages it.

  • An infrastructure: platform that supports the entire system and communicates with the various players. It secures and centralizes exchanges and must be certified by a third party as to its robustness against cybercriminal attacks.

  • A management website or mobile application for end users and program administrators. The so-called "visible" part of the iceberg since it formalizes in the form of screens a user experience that processes information from the entire program (for example: the balance available on a card, past transactions, amounts loaded etc.). Now that the notion of program is clarified and all the stakeholders in the system are known, let's get back to our heads.

Where does the Programme Manager intervene? What is his role in all of this?

By definition, the Program Manager manages the Program. Its role is to design, develop and manage the platform that will support the payment program and its services. Let's take an example. A company specializing in expense report management for SMEs wants to launch a program for its clients that manages professional expenses. To make its program attractive with a fluid and digitized experience, the company decides to provide employee badges that also serve as payment cards. Ideal for centralizing expense reports. The project seems completely feasible. But the company does not have the technical, human and financial resources to develop its own solution. The company does not have the bank approvals to issue cards and would like a program quickly implemented. Going through your traditional bank to create this service would take years. Knowing the ins and outs of such a program and then making contact yourself with all the stakeholders in the creation of a program (Bin Sponsor, Processor, Office ...) is a colossal job and it is not his heart of job. This is where the Program Manager comes in. Calling on a Program Manager means minimizing the number of contacts, minimizing risks, delays, regulatory burden but also costs! The Program Manager is an aggregator who coordinates and controls the different entities involved in providing the solution for the client. He develops the platform so that it is operational for the customer, secure and legally compliant. He is the customer's sole point of contact and the architect of the solution.
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Prepaid cards programme diagram

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What is a Program Manager in the Fintech market? What is a company that does the Programme Management in the financial sector?

10 years ago, new players appeared with the introduction of the new status of electronic money institution (EME) in Europe. The new concept of « Programme Manager » emerged. The new European directive (reinforced by the reform of the single market for payments in euros) authorizes the issuance of electronic money without the need for bank support. Providing payment services then becomes accessible for organizations that are not banks. As a result, companies obtain regulated statuses and can issue means of payment, such as prepaid cards, under certain conditions. This opens up an ocean of possibilities.
===
But before talking about Program Management or Program Management, let's talk about program.
===

Finally, what is a payment program/programme?

Let’s take the simplest example: rechargeable payment cards or prepaid cards which have seen their use explode in Europe. A card programme includes:

  • The issuance of electronic means of payment on the basis of a BIN number (Bank Identification Number: the reference code of the issuing account which can be seen on the first 6 digits of your card code). A BIN Sponsor intervenes here, which is an establishment with the regulated status of issuing electronic money, it may be a bank or any other similar organization.

  • The processing of payments includes operations and transactions between payer / paid / and payment medium: the organization managing this part is called a Processor

  • A payment network or more commonly referred to as a "Card Scheme" is the most well-known part of the system since it concerns global networks such as Visa, Mastercard, CB, Union Pay or American Express. Network members (especially merchants) accept payments within one or more networks.

  • A Bureau: quite simply the manufacturer who encodes and personalizes the means of payment. For example for the card: usually plastic, it is produced according to strict standards, from the chip to the numbers through to the magnetic strip. New Bureau are offering more and more original payment media such as metal or ceramic cards but also wearables such as connected jewelry).

  • A supervisory authority: in France, it is the ACPR (prudential control and resolution authority) which plays the role of regulator. This organization backed by the Banque de France supervises the activity with the aim of protecting users and ensuring the stability of the financial system. *A trust account is an account managed by an independent and trusted third party that allows money to be processed on behalf of another person or entity. It is often the banking institution represented by the Bin Sponsor that manages it.

  • An infrastructure: platform that supports the entire system and communicates with the various players. It secures and centralizes exchanges and must be certified by a third party as to its robustness against cybercriminal attacks.

  • A management website or mobile application for end users and program administrators. The so-called "visible" part of the iceberg since it formalizes in the form of screens a user experience that processes information from the entire program (for example: the balance available on a card, past transactions, amounts loaded etc.). Now that the notion of program is clarified and all the stakeholders in the system are known, let's get back to our heads.

Where does the Programme Manager intervene? What is his role in all of this?

By definition, the Program Manager manages the Program. Its role is to design, develop and manage the platform that will support the payment program and its services. Let's take an example. A company specializing in expense report management for SMEs wants to launch a program for its clients that manages professional expenses. To make its program attractive with a fluid and digitized experience, the company decides to provide employee badges that also serve as payment cards. Ideal for centralizing expense reports. The project seems completely feasible. But the company does not have the technical, human and financial resources to develop its own solution. The company does not have the bank approvals to issue cards and would like a program quickly implemented. Going through your traditional bank to create this service would take years. Knowing the ins and outs of such a program and then making contact yourself with all the stakeholders in the creation of a program (Bin Sponsor, Processor, Office ...) is a colossal job and it is not his heart of job. This is where the Program Manager comes in. Calling on a Program Manager means minimizing the number of contacts, minimizing risks, delays, regulatory burden but also costs! The Program Manager is an aggregator who coordinates and controls the different entities involved in providing the solution for the client. He develops the platform so that it is operational for the customer, secure and legally compliant. He is the customer's sole point of contact and the architect of the solution.
===

Prepaid cards programme diagram

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Interview with Charles Orsel des Sagets, CEO of E-Pay Space

Nothing better than putting a face to names. Charles Orsel des Sagets, Managing Director of E-Pay Space has entered our question box. Accustomed to the FinTech sector, he is also an expert in security and telecommunications. He created E-Pay Space with other Jedi masters of finance in 2016 to meet a real customer need: that of having tailor-made payment solutions!

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