What is Transaction Laundering?

Transaction laundering obscures prohibited or high‑risk transactions with a “clean” merchant account. The front site funnels payments for an undisclosed back‑end (counterfeits, drugs, adult, illegal gambling). Acquirers see innocuous descriptors; consumers see charges inconsistent with the storefront. Risk rolls downhill—chargebacks, fines, brand damage.

Detection: site content/inferred MCC mismatch, traffic sources illogical for claimed business, inexplicable shifts in ticket size, many refunds to new instruments, and groups of buyers linked to reshippers. Web crawls and test buys can help; graph signals help more.

Controls: robust KYB for entity, signer identity verification for humans behind it, and reserves/rolling caps until history normalizes. Monitor descriptors, URLs, and fulfillment; terminate corridors that bypass reviews. Link escalations and filings to documented AML compliance program so action is swift and defensible.

If your platform moves money, this attack is coming. Be ready.