FATF Updates Standards to Improve Financial Crime Detection on Payments

The Financial Action Task Force (FATF) has updated its standards to streamline international requirements, with the aim of enhancing the safety of cross-border payments and helping better detect financial crime.

The revised standards clarify responsibilities across the payment chain to improve accuracy and help investigators locate key information more easily.

The FATF will introduce standardised requirements for the information that must accompany peer-to-peer cross-border payments over USD or EUR 1,000, including name, address, and date of birth. This is designed to ease compliance, improve efficiency, and increase transparency to help detect suspicious transactions.

The new standards will also require financial institutions to adopt new technologies that help prevent fraud and errors, such as verifying recipients' banking details. This aims to give customers peace of mind that their money is reaching the right destination.

In addition, transactions carried out using a credit, debit, or prepaid card for the purchase of goods or services will remain exempt, but clarifications have been made to define the scope of “purchase of goods and services.”

The changes aim to ensure consistent information in payment messages to create a clearer picture of who is sending and receiving money and help reduce fraud and errors affecting customers.

They also reinforce the FATF’s strategy to establish a comprehensive and consistent framework of measures for countries to use to combat money laundering, terrorist financing, and the financing of weapons of mass destruction proliferation.

The changes will come into effect by the end of 2030, and the FATF will produce guidance and continue to engage with the private sector to help industry prepare for the changes.