The US Treasury Department just made opening a payment processing account a bit more involved

The Financial Crimes Enforcement Network (FinCEN) is a bureau of the U.S. Department of the Treasury that collects and analyzes information about financial transactions in order to combat money laundering, terrorist financing, and other financial crimes. To pursue this mission, FinCEN requires certain information when bank accounts – including credit card payment processing accounts – are opened.

Beginning in May 2018, FinCEN is requiring additional information to identify the owners of businesses opening accounts for credit card payment processing.  Specifically, where in the past we only needed one owner’s information, we’re now required to provide personal information on EACH person who individually owns 25% or more of the legal entity.

If you’re in the mood for some very dry reading, you can find the requirements here.

Note that taking this information on behalf of the Treasury does NOT mean that a credit report is required for each individual owner.  Credit reports will continue to be limited to the controlling individual – the person who is signing the application. This person need not be an owner of 25% or more of the legal entity; they can simply be an officer authorized to make legal commitments on behalf of the organization.

While we recognize that this requirement presents an extra burden in the application process, cutting down on financial crimes will benefit all honest business owners and individuals.  The fact that no credit report is pulled on the other beneficial owners makes this a relatively light demand, in our view, and one that – in any case – we’re required to fulfill.

FAQ published by FinCEN on customer due diligence requirements can be found here and here