ATM Cards Being Used for Money Laundering

In most African countries, credit/debit cards are not commonplace. Thus, the few enlightened ones who need to use one of the global payment networks widely accepted on the Internet (prominently MasterCard and Visa) need to do so via third parties. Though some of these ‘cards’ are virtual, some are physical and can be used to withdraw funds at any of the Visa or MasterCard branded ATMs, worldwide.

Now, the point here is, I rely on these kinds of cards as well but the unfortunate thing is, some people have chosen to abuse this facility.

I had never doubted the possibility of using these anonymous ATM cards for money laundering and I saw this headline of the website of E-Commerce Times, a moment ago: “ATM Cards Being Used for Money Laundering

“The key to ending drug trafficking is to wipe out the money side,” Drug Enforcement Administration chief Karen Tandy said. The DEA seized US$2 billion in 2005, up from $500 million in 2003.

Prepaid ATM banking cards are increasingly being used to launder profits from crime out of the United States, a U.S. Treasury Department report says.

The department released an analysis of security Free Trial: Eliminate IM compliance and security threats with policy and enforcement. weaknesses using input from 16 federal agencies, and said smuggling cash in bulk remains the most popular method of money laundering.

However, it noted the increasing use of prepaid cash cards that can be purchased anonymously at retail and check-cashing stores across the nation. The cards have a certain value recorded on them, and then the cardholders can use the cards to withdraw the money from automated teller machines around the world.

The report said that companies that issue cash cards outside the United States do not have to comply with U.S. anti-money-laundering laws, but that such cards can be used at U.S. ATMs.

“The key to ending drug trafficking is to wipe out the money side,” Drug Enforcement Administration chief Karen Tandy said. The DEA seized US$2 billion in 2005, up from $500 million in 2003, USA Today reported.

Acquiring these cards got more stringent after the September 11th 2001 attack on the World Trade Center’s twin towers in New York city, USA. Apparently, the US government was trying to frustrate any avenue that could be available for terrorists to subtly move the funds they need for their operations.

I’m a bit worried. If these anonymous global ATM cards are phased out for any reasons, it would adversely affect many e-commerce practitioners here in Africa.

1 Comment

  1. […] Just recently, I wrote about “ATM Cards Being Used for Money Laundering” and expressed my fears about the US government cancelling the issuance of anonymous ATM cards, due to its abuse by money launderers. The same scenerio could be unfolding with e-gold. The sad thing is, as I said earlier, In most African countries, credit/debit cards are not commonplace. Thus, the few enlightened ones who need to use one of the global payment networks widely accepted on the Internet (promonently MasterCard and Visa) need to do so via third parties. Though some of these ‘cards’ are virtual, some are physical and can be used to withdraw funds at any of the Visa or MasterCard branded ATMs, worldwide. […]

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