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Published online by Cambridge University Press: 20 January 2024
“New payment technologies” was the term adopted by the FATF to identify emerging methods of payment in 1996. Today digital currencies and bitcoin immediately come to mind for the reader. Fifteen years ago, however, it was pre¬paid credit cards and e-gold that were of interest, with concerns surrounding their potential use in money laundering. The FATF study in 2006 was a follow up to the discussion of “Developments in New Technologies” included in the 1997 typologies report, reporting on presentations made to the group of experts by firms involved in electronic money (e-money) services. The typologies meeting theme of e-money resulted from the 1996 revision to the Forty Recommendations, which introduced a new Recommendation 13 directing states to “pay special attention to money laundering threats in new and developing technologies that might favour anonymity”. The latest version of the Forty Recommendations now addresses the topic in Recommendation 15, New Technologies, and broadens the scope of concern for AML/CFT to include new payment products, business practices and delivery systems.
In 1996, e-money was understood as either a stored value card, an internet-based system or a “hybrid system” combining features of these two technologies. The stored value or prepaid cards may carry the brand of a bank, Mastercard/Visa, a store or a money transfer firm. The customer places money on the card and then uses it just like they would a credit or debit card. As contactless technology has evolved, urban transportation systems have introduced the prepaid card in place of a ticket. In some cities the urban transportation system's card is also accepted for other payments, such as at a shop in the station. The early internet-based systems facilitated online payments and may have been linked to the customer's bank account. Although the passage of time means these early systems appear rudi¬mentary today, in 1997 the FATF report described them as “sophisticated tech¬nologies”, which is understandable when compared to the other payment methods available at the time. The discussion during the 1996 typologies meeting began with presentations from four industry organizations involved in providing these new financial technologies.
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