Payment21® is operated by the first fully licensed Bitcoin processor in the world

Zurich/Delaware, March 2015. The owner of the Payment21®-brand is now registered as a financial intermediary in Switzerland. The third-party processor is supervised  by  a semi-governmental  regulatory  organization  for compliance  with  Anti-Money-Laundering  (AML)  laws  and Know-Your-Customer (KYC) rules. This regulatory body acts on behalf of the Swiss Financial Market Authority. “Obtaining approval from the regulators  is  a  huge  milestone  for  the  European  digital  money marketplace  and  enriches  the  global  Bitcoin  ecosystem,”  a Payment21® spokesperson said.

Moving Media GmbH, the owner of the Payment21®-brand, is now an enrolled member of Geneva’s ARIF, the Association Romande des Intermédiaires Financiers. This is one of the most sought-after Self-Regulatory Organizations (SRO) in Switzerland. The Swiss-based payments gateway is the first fully licensed Bitcoin processor in the world specializing in providing cross-border transactions to businesses that accept digital cash for the purchase of goods and services.The company operates as a regulated financial intermediary offering fully compliant Bitcoin processing services. Its offices are located in the Canton of St. Gallen, situated in the German-speaking eastern area of the alpine country. According to Managing Director Bernhard Kaufmann, “Government licensing is crucial when establishing a payments business. Official approval from a leading European financial center such as Switzerland is a key differentiator in the competitive landscape.”

The business model of the company and its compliance with applicable laws and regulations were carefully evaluated by Swiss FINMA, the Financial Market Supervisory Authority, prior to being admitted as a member of ARIF. The financial regulator provided preliminary clarification confirming that processing Bitcoin payments for buying goods and services from merchants as well as providing Bitcoin money transfer services is permissible under the terms of Swiss law.

With this new regulatory status, the proprietary payment gateway available at is positioned to offer processing services to ecommerce vendors around the globe. Another important target group includes regulated entities such as financial institutions and telecommunications companies.

In addition to offering gateway services, the technology company operates an exchange office that enables Payment21® to broker Bitcoin by exchanging digital money into legal tender. Currently, payment services are under limited release whereby the core e-billing engine and a number of add-on features have successfully passed beta testing. “We only accept merchant applications from selected enterprises for the time being,” the firm’s Head of Sales remarked.Kaufmann adds, “To put the minds of regulators at ease, we built a Web-based merchant on-boarding platform that is compliant with banking laws.” The online registration tool facilitates the sales process and allows for managing risk in accordance with regulatory requirements.

When asked why Payment21® was making this extra effort, the company’s Compliance Officer noted, “Any third-party payments processor is well advised to anticipate the regulations set forth in the Bank Secrecy Act (BSA) regardless of whether it is under Swiss law, US law, or the rules of any other jurisdiction. The same is true of the Anti-Money Laundering Act (AMLA). As a payments processor, we have to keep up with the compliance standards of our banking partners, as well as maintain the same scrutiny in preventing money laundering.”

“In today’s globalized tax environment, it is prudent to follow the white money strategy of the Swiss government,” the legal advisor of Payment21® commented. “Bitcoin is a reputation risk for many internationally active businesses even though digital cash is an elegant solution for closing the gap between developed and emerging markets, where financial inclusion is the priority du jour.” Attempts to adopt Bitcoin for anonymous transacting in order to avoid taxation or to commit crime are prevented by Payment21®’s merchant boarding policy. To control the terms and conditions, the company deploys a real-time fraud prevention system called Verification Loop™. For transaction monitoring, a patent-pending Mitigation Monitor™ is used.

During the development process, the company’s gateway was certified by two major multinational banks headquartered in the USA. They have acknowledged the internal due diligence procedures established by the Swiss compliance team. To ensure banking-compliance, Payment21® maintains a BSA/AMLA Compliance Program as well as a BSA/AMLA Merchant Risk Assessment Program.

Payment21® comes with distinctive features. It is not just another Bitcoin exchange that accepts deposits for financial speculation. Instead, the company operates a payment gateway enabling consumers and merchants to utilize the benefits of Bitcoin for the real economy. Payment21® transaction procedures ensure full compliance with all applicable AML-laws. In addition, KYC-rules cater to the demands of financial market authorities and other regulatory agencies both in Europe and abroad.

Kaufmann explains that there is a larger point to be made in pursuing proportionate oversight: “We believe that Bitcoin companies ought to follow the same regulatory requirements as any other player in the financial services industry. At the end of the day, we all sit in the same boat. Therefore, our unique selling proposition goes well beyond merely providing cryptographic payments processing to ecommerce vendors.”

“We have an augmented focus on offering services to regulated entities such as the traditional banking sector,” adds the company’s Operations Manager. “Regulated entities are not only in need of an additional layer to manage risk when dealing with virtual currency, but also require websavvy security experts who know how to handle cryptographic protocols.” That is where Payment21® comes into play. It offers custom-made fintech solutions and sophisticated integration modules to both regulated companies and substantial ecommerce merchants with a global customer base.

The global payments market is highly fragmented, especially when it comes to ecommerce and mobile payments. There are hundreds of payment methods available, and many different verticals that all have specific challenges. Kaufmann says, “At Payment21® we do not consider ourselves to be a direct competitor of the established Bitcoin processors in Europe and North America. In fact, we target specific niches rather than the mainstream market. Achieving robust compliance with the regulatory framework allows us to take up merchants that unregulated processors cannot serve because of the client’s legal obligations.”

Many merchants start accepting Bitcoin for purely marketing reasons. They want to be part of the movement honoring the trend that has been cultivated by the Bitcoin-community. The Payment21® Operations Manager describes the target group of their merchants as “an incredibly intelligent and loyal crowd that is well-educated and widely-spread – organizing meetings in thousands of urban centers around the planet.” Customers who pay by Bitcoin are considered a valuable asset amongst online merchants because these mostly young people embrace the paradigm shift in finance. These early adopters are the ones who offer sustainable profits for the years ahead.

Most Bitcoin processors are not licensed. Instead, they use offshore companies in jurisdictions where Bitcoin is not regulated at all. For the most part, however, these market participants aim to stay within the given legal framework. Only a few Bitcoin exchanges are properly licensed, such as Coinbase in the US (limited to a few states) or Safello in Sweden. Besides those two companies, Paymium in France and in Germany are both supervised because they have partnered with banks. In addition, two Swiss Bitcoin-brokers and ATM-providers are correctly licensed. Nonetheless, the legal advisors of Payment21® state that the company appears to be the first third-party processor in the world with an appropriate license and duly qualified employees. Its staff members work from a high-security office space located in a Swiss railway station in close proximity to Austria, Germany, and Liechtenstein.

Even though the managing team has been involved with the Bitcoin community since 2011, the firm takes a moderate stance when discussing the crypto revolution and maintains a more neutral status. It does not sponsor the International Bitcoin Foundation, it is not a member of the Bitcoin Association of Switzerland, nor is it affiliated with the Swiss Digital Finance Compliance Association (DFCA). It is, however, considerate towards the activities of the latter two groups, which include lobbying for a more business-friendly legal framework to enable innovation in the Swiss crypto currency sector. DFCA counts Monetas, SBEX, Bitcoin Suisse, and Ethereum among its members.

Payment21® is fully committed to the highest data protection standards set by the Swiss Data Protection Act, which means both payers and payees using the gateway can feel secure when transacting with Bitcoin. The firm is enthusiastic about block chain technology because it significantly simplifies banking and international payments. More importantly, digital money has the potential to act as a disruptor with a positive impact on monetary policies and global wealth distribution.

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