Payments glossary · Compliance
AML (Anti-Money Laundering)
Anti-money laundering (AML) covers the laws, controls and procedures that stop criminals passing illicit money through the financial system, including customer due diligence, transaction monitoring, sanctions screening and reporting suspicious activity to the authorities.
How AML works
International AML standards are set by the Financial Action Task Force (FATF), whose Recommendations countries implement through national law. In the UK the core rules are the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2017. The EU is moving from directives to a single rulebook: the Anti-Money Laundering Regulation (EU) 2024/1624 applies from 10 July 2027, and the new EU Anti-Money Laundering Authority (AMLA) in Frankfurt is due to start directly supervising selected high-risk financial firms in 2028.
Banks, PSPs and e-money institutions are obliged entities, so AML duties shape how they treat merchants. They must know who owns and controls the business, understand where money comes from and where it goes, monitor for unusual patterns and report suspicions. That is why providers ask about your business model, expected volumes and customer countries, and why they may pause settlements while they look into unusual activity.
Most merchants are not obliged entities themselves, but some are: in the UK and EU, for example, gambling operators and dealers accepting large cash payments have their own AML obligations. Keeping good records, describing accurately what you sell and answering provider queries promptly all reduce friction.