Navigating Compliance in Fintech and Payments: Tear Down Roadblocks to Your Success

As a developer you want to build, test, execute, and iterate as fast as possible. What if you were building your fintech platform, and after garnering approval of investors, and a business bank, you are hit with obstacles that you are required to address before allowing your first transaction with a customer?

In the fast moving world of payments, businesses who are starting out or expanding to different countries often find themselves awaiting approval while trying to meet regulatory standards enforced by compliance and legal teams. Developers who are building platforms and services as quickly as possible can feel disrupted by the approval process as if they are in a pickle. On one hand, they strive to create innovative solutions that meet the needs of their clients and customers. On the other hand, they must navigate a complex web of regulations and standards to ensure their products are compliant with industry requirements.

For many developers, the heart-wrenching moment comes when their carefully crafted creations are denied approval or stalled by compliance teams. It can feel like a blow to their creativity and a setback to their progress. However, this process is essential not only for their own protection, but also for the protection of customers and the most vulnerable. For example, digital platforms that do not have the right onboarding process and customer verification could be bringing on false identities that may be there with the sole purpose of scamming others.

One company that stands against fraud, risk, and illegal activity is Rapyd, a leading global Fintech-as-a-Service platform. Rapyd’s provided services, which includes payments, disbursements, issuing, and digital wallets, also includes compliance checks and verification. This involves implementing robust processes to verify the identity and validity of businesses and customers using their services. This commitment helps create a secure environment where ethical business practices can flourish.

KYB and KYC: Cornerstones of Ethical Business Practices

One of the key components of ethical business practice is knowing who you are doing business with. This is where the processes of Know Your Business (KYB) and Know Your Customer (KYC) come into play. KYB is a set of requirements that allow financial service providers like Rapyd to verify the identity of businesses. It involves submitting information about the company, authorized users, shareholders, and financial compliance. On the other hand, KYC focuses on verifying the identity of individual customers who use the services.

These processes are part of a larger Anti-Money Laundering (AML) effort, aimed at preventing financial networks and systems from being corrupted by bad actors seeking to use and generate funds for illegal activities. Money laundering is a process through which illicit funds are introduced into traditional financial networks, disguising their source and giving them the appearance of legitimacy. KYB and KYC processes play a crucial role in combating money laundering by disbanding anonymity through identity verification.

​​Developer Tips: Staying Ahead in Compliance Integration

So, what can developers do to get ahead of the game and ensure compliance when integrating with Rapyd or other payment processors? Here are a few tips:

Familiarize Yourself with the KYB and KYC Terms

Understanding the general terms and requirements involved in KYB and KYC will help developers navigate the compliance landscape more effectively. Take the time to learn about the common abbreviations that are used in Fintech and mentioned in documentation.

Read the Restricted and Prohibited List Before Integrating

Each Fintech company should know who they can and cannot do businesses with. Look for a list of Restricted & Prohibited Businesses listed on their website. Understand that restricted cases may require more support and time to be approved to address any compliance-related concerns.

Collaborate with Compliance Teams

Establish open lines of communication with compliance teams to ensure a smooth integration process. If you are thinking of integrating you should talk to Sales, Compliance and Compliance Operations team members. Compliance professionals can provide guidance and support, helping developers address any compliance-related questions.

Implement Secure Software Development Practices

Developers should follow industry best practices for secure software development. This includes incorporating security considerations at every stage of the development process, undergoing security-related training, and conducting code reviews to identify potential vulnerabilities.

Understand the Season and Goals of Your Partners

If you are looking to integrate with a fintech partner, you should get to know the priorities of that organization and exactly what season they are in. Talk to sales. Talk to support or sales engineers. Talk to compliance if you can. You may have a great partnership opportunity in the future. However, if they are not focused on businesses your size, then you could save yourself money, time, and disappointment.

Submit Your KYB Forms ASAP

If you know you want to use a fintech partner, then you should submit your KYB records as soon as possible as you build, test and prepare to Go-live. The faster you get approved, the faster you will be able to hit your deadlines.

Join a Fintech Community

Be a part of a community of developers, and business experts that is built around fintech. You can learn from others and share collective information about the growing industry, and financial and compliance regulations.

Good Stewards: Striking a Balance Between Growth and Security

In the ever-changing landscape of compliance, developers play a critical role in ensuring the security and integrity of financial systems. While the compliance process can be challenging and even frustrating at times, it is a necessary step to protect businesses and individuals from fraud, risk, and illegal activities. Companies like Rapyd and their commitment to compliance are essential in fostering a secure environment for businesses to thrive.

By embracing compliance and taking the necessary precautions, developers can navigate the complexities of the regulatory landscape while creating innovative solutions that drive the future of fintech. It’s a delicate balancing act, but one that ultimately benefits everyone involved.