Anti-Money Laundering (AML) and Know Your Customer (KYC) Policy

Paywiz

Effective Date: 1/13/2025
Version: 1.0
 

 

Introduction

Paywiz is committed to preventing money laundering, financing of terrorism, and other illicit financial activities. We will take all necessary measures to comply with Mexico's General Law on the Prevention and Identification of Operations with Resources of Illicit Origin (Ley Anti-Lavado), regulations set by the National Banking and Securities Commission (CNBV), and the Financial Intelligence Unit (UIF).

This policy outlines how Paywiz will implement Anti-Money Laundering (AML) and Know Your Customer (KYC) procedures in line with Mexican law. Our goal is to protect our business, our customers, and the integrity of the financial system by applying diligent procedures to identify, assess, and manage the risks associated with money laundering and terrorist financing.

 

This Anti-Money Laundering (AML) Policy outlines the measures implemented by Paywiz to ensure that its services are not used for illicit activities, and that the company complies with all relevant laws and regulations to safeguard against money laundering and terrorist financing.

Scope

This policy applies to all employees, officers, contractors, agents, affiliates, and third-party service providers of Paywiz, as well as all products and services offered, including:

• Electronic payment processing services

• Remittance services

• Money transfers

• Digital wallets

• Cryptocurrency transactions (if applicable)

 

AML Program and Compliance Structure

To comply with Mexican regulations, Paywiz has implemented the following AML program and compliance framework:

• AML Compliance Officer (AMLCO): [Name or Title] will serve as the designated AML Compliance Officer, responsible for overseeing all AML activities, ensuring adherence to legal requirements, and reporting suspicious activities to the relevant authorities.

• AML Risk Assessment: Paywiz will conduct an annual Risk Assessment to identify and evaluate potential risks related to money laundering and terrorist financing. This includes assessing customer types, geographical risk, product risk, and transaction patterns.

• Training: All relevant employees, especially those interacting with customers or involved in payment processing, will receive annual AML training to recognize suspicious activities, understand AML compliance requirements, and know how to report suspicious activities.

•  

* Know Your Customer (KYC)

• KYC Procedures:

• As part of the CDD process, Paywiz will implement thorough Know Your Customer (KYC) procedures. This includes:

• Collecting detailed information about customers (such as full name, address, date of birth, and official identification).

• Verifying the authenticity of the customer’s submitted documents.

• Screening customers against relevant watchlists, including the UIF and other international sanctions lists.

• Ongoing KYC Updates:

• Paywiz will periodically update the KYC information for existing customers, especially for those identified as high-risk.

 

* Customer Identification and Verification

2.1 Customer Identification
We verify the identity of all customers prior to establishing a business relationship. Customer identification requires the following:

• For Individuals:

  • Full name

  • Official government-issued identification (e.g., INE, passport, or driver’s license)

  • Address (proof of residence document, such as a utility bill)

  • Date of birth

  • Tax Identification Number (RFC)

• For Legal Entities (Companies):

  • Name of the legal entity

  • Corporate identification number (RFC)

  • Names and identification of the directors or authorized representatives

  • Names of beneficial owners (individuals who control or benefit from the company)

  • Official documentation (e.g., the company’s constitutive act, registration in the Public Registry of Commerce)

  • Address of the legal entity

Identification Systems
We use a combination of manual verification and automated systems to confirm the identity of customers. Our systems include:

• ID Verification Software: We utilize digital identity verification tools to validate official identification documents and match them against live facial recognition checks.

• Database Screening: We screen customers against a variety of databases, including those maintained by the Financial Intelligence Unit (UIF), and global sanctions lists (e.g., OFAC, UN Sanctions, and EU Sanctions List).

• Ongoing Monitoring: We use automated tools that track customer transactions in real-time to detect suspicious activity.

 

* Customer Investigation and Identification

 Risk-Based Approach
We assess each customer’s risk level based on factors such as:

• Customer Type: Individual or legal entity, high-risk industries (e.g., casinos, crypto, money transfer businesses)

• Geography: Customers from high-risk countries or jurisdictions subject to international sanctions

• Transaction Patterns: Unusual or large transactions, especially if they don't align with the customer’s profile or business model

Investigating High-Risk Customers
For customers identified as high risk (e.g., Politically Exposed Persons, or PEPs), we apply Enhanced Due Diligence (EDD), which involves:

• Verifying the source of funds

• Gathering more detailed information on the customer’s background and business operations

• Obtaining references or documentation from other financial institutions or service providers

If any discrepancies arise during the verification or investigation process, further inquiries will be conducted, and the customer may be flagged for continuous monitoring

 

.Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD)

• CDD Procedures:
  Paywiz will conduct Customer Due Diligence (CDD) on all customers before providing services. This includes verifying the customer’s identity by obtaining official documents such as a passport, National ID card (INE), or tax identification number (RFC). In the case of legal entities (companies), the identities of the beneficial owners and authorized representatives will also be verified.

• Risk-Based Approach:
  The company will apply a risk-based approach to determine the level of due diligence required. Higher-risk customers, such as Politically Exposed Persons (PEPs), customers from high-risk countries, or those exhibiting unusual transaction patterns, may undergo Enhanced Due Diligence (EDD).

• Ongoing Monitoring:
  Paywiz will implement ongoing monitoring of customer accounts and transactions to detect unusual or suspicious activities. This will be done using both automated systems and manual review processes to ensure compliance.

Suspicious Activity Monitoring and Reporting

• Monitoring Suspicious Transactions:
  Paywiz will continuously monitor all transactions to identify unusual activity that may be indicative of money laundering or terrorist financing. This includes looking for patterns such as large or frequent transactions without a clear business purpose, or transactions involving high-risk countries or entities.

• Suspicious Activity Reporting (SARs):
  If suspicious activity is detected, Paywiz will file a Suspicious Activity Report (SAR) with the Financial Intelligence Unit (UIF), the Mexican financial intelligence authority, within the prescribed timeframe (usually within 30 days of detecting the suspicious activity).

• Record Keeping:
  All transaction records, customer identification documents, and SAR filings will be maintained for a minimum of five years to comply with Mexican legal and regulatory requirements.

​
 

* Training Against Money Laundering

Employee Training Program
All employees, especially those in direct contact with customers (e.g., customer service, sales, and compliance officers), will undergo AML and KYC training. This training is aimed at recognizing and preventing potential money laundering activities and ensuring compliance with AML regulations.

• Initial Training: Provided to all new employees within their first month of employment.

• Ongoing Training: Conducted annually for all employees. The training will cover:

  • Identifying red flags for money laundering or terrorist financing

  • Procedures for reporting suspicious activities

  • Customer identification and verification procedures

  • Legal obligations under Mexican AML law

Certification
Employees are required to pass a certification exam at the end of the training session to demonstrate their understanding of AML and KYC compliance.

 

* Storage and Security of Files

Record Keeping
Paywiz will maintain customer records for a minimum of five years following the closure of an account or termination of a business relationship. These records include:

• Customer identification information

• Transaction history

• Any correspondence or documentation related to suspicious activity or investigations

• Reports submitted to the Financial Intelligence Unit (UIF) and other authorities

File Storage
Customer records will be stored in a secure, encrypted digital database that is regularly backed up. Physical records will be kept in locked, secure storage areas with restricted access. Access to customer records is limited to authorized personnel only, in compliance with data privacy laws.

 

* Actions in Case of Recognized Threats or Suspicious Activity

Suspicious Activity Identification
If a transaction or pattern of transactions raises suspicion, the following steps will be taken:

• Internal Review: Conduct an internal investigation to determine if the activity meets the criteria for suspicious activity.

• Report: If the activity is deemed suspicious, file a Suspicious Activity Report (SAR) with the Financial Intelligence Unit (UIF) as required by law.

• Freeze Accounts: If the threat involves potential fraud or illegal activity, Paywiz may suspend or freeze the customer’s account while the investigation is ongoing.

Reporting
All suspicious activity, including potential money laundering or terrorist financing activities, will be reported immediately to the relevant authorities. Reports will be filed with:

• Financial Intelligence Unit (UIF)

• National Banking and Securities Commission (CNBV)

• Prosecutor's Office (if necessary)

 

* Competent Authorities

The competent authorities for overseeing AML compliance in Mexico include:

• Financial Intelligence Unit (UIF): The primary authority for receiving, analyzing, and disseminating financial intelligence related to money laundering and terrorist financing.

• National Banking and Securities Commission (CNBV): Responsible for overseeing compliance with AML regulations in the financial sector.

• Bank of Mexico (Banxico): Regulates financial institutions and monitors compliance with AML guidelines.

• Mexican Tax Administration Service (SAT): Oversees tax-related aspects and monitors for illicit activities, including money laundering.

Paywiz is committed to working closely with these regulatory bodies and law enforcement to ensure compliance with all applicable laws.

 

* Policy Review and Updates

 Monthly, Semi-Annual, and Annual Reviews
The following review schedule will be applied to ensure that the AML and KYC policies remain effective:

• Monthly Review: The AML compliance team will review high-risk transactions, flagged customer accounts, and ensure all suspicious activity reports (SARs) are up to date.

• Semi-Annual Review: A more comprehensive review of the entire AML/KYC program will be conducted every six months to assess its effectiveness and compliance with any changes in Mexican law or international standards.

• Annual Review: A full review of the policy, training programs, internal systems, and the effectiveness of customer identification and monitoring systems will be conducted annually. Updates will be made to the policy based on any changes in regulatory requirements or best practices.​

​

Sanctions Compliance

Paywiz will ensure that none of its services are used to facilitate transactions with individuals or entities subject to international sanctions. This includes:

• Screening Against Sanction Lists:
  All customers and transactions will be screened against relevant sanctions lists, such as those issued by the U.S. Office of Foreign Assets Control (OFAC), UN Sanctions, and the Mexican Government’s sanctions lists.

• Blocking Transactions:
  If a customer or transaction is found to be linked to a sanctioned individual or entity, Paywiz will block the transaction and immediately report it to the relevant authorities.

* Cooperation with Law Enforcement

Paywiz will cooperate fully with law enforcement authorities, regulatory bodies, and the UIF in investigating and reporting potential money laundering, terrorist financing, or other illegal activities. The company will comply with all requests for information and investigations made by relevant authorities.

* Penalties for Non-Compliance

Failure to comply with this AML policy may result in disciplinary action, including termination of employment, and in some cases, legal action. Non-compliance with AML regulations can result in significant financial penalties and reputational damage to Paywiz.

* Review and Updates

This policy will be reviewed and updated at least annually, or more frequently if necessary, to reflect changes in the applicable laws and regulations in Mexico or to adjust to the company’s evolving risk profile. The updated policy will be approved by the AML Compliance Officer and the Board of Directors.

See below for a brief KYC CHART









 

​​