What type of companies are required to have an AML policy?

Companies dealing with cash loads onto prepaid cards are required to have an Anti-Money Laundering (AML) policy because they are classified as money services businesses (MSBs) under regulations set forth by bodies such as the Financial Crimes Enforcement Network (FinCEN) in the United States. These regulations are designed to prevent money laundering and other financial crimes by ensuring that businesses involved in monetary transactions have systems in place to detect and report suspicious activities.

Prepaid cards represent a form of payment that can facilitate anonymous transactions and may be exploited for illegal purposes, such as money laundering. As a result, businesses that handle the loading and unloading of cash to these cards must enact comprehensive AML procedures to mitigate potential risks and comply with regulatory obligations.

While it’s true that banks and financial institutions also have AML requirements, the scope of these obligations extends to various other entities within the financial ecosystem. Therefore, the emphasis here is specifically on businesses that manage cash loads onto prepaid cards, as they are directly under strict regulatory scrutiny to maintain an AML policy that addresses the risk of money laundering specific to their operations.