Compliance Overkill Part 1: Enhanced Due Diligence & A Need for Efficiencies.

During a recent IPT Africa survey, we asked a charity audience, “…what do you feel are the biggest challenges facing charities when it comes to international payment providers in the financial sector?”

Coming out resoundingly on top at 71.43% was “Compliance Overkill (in the context of sensitive payments, opening an account, due diligence reviews, etc.)” with “poor or lack of customer support and aftercare” coming in second at 42.86%. Banking and FI-related due diligence in all its forms can be a huge pain for charities, especially when these due diligence asks are prompted by INGOs responding to time-sensitive crisis in countries with fragile local banking or high-risk jurisdictions.  Alternatively, repeat payments into high-risk jurisdictions (such as local project overheads or local staff salary payments) can be subject to the same compliance requests repeatedly. In these situations, the feeling of “compliance overkill” can overwhelm charities.

Unfortunately, “Compliance Overkill” is often confounded by “poor or lack of customer support and aftercare.” Time is often of the essence in these situations, and whilst charities acknowledge that it’s a necessity for banks and FIs to make these asks, the process of supplying payment-specific data is often clumsy, time-consuming, and subject to drawn-out service level response times, and internal escalation processes within the payment’s provider’s organisation.

The following scenario may feel all too familiar to a charity working overseas:

A charity pays emergency aid to a local staff member working in a politically sensitive country. The charity believes that the payment is completed following transaction execution on their payment platform. 24 hours later, they’re informed by their payments provider that the payment is being held and additional information is required to clear a potential compliance concern – with no insight into what the compliance concern might be.

The charity is asked to complete a form detailing the payment type, supply supporting documentation (such as an invoice or bill of laden), and copy ID for the local recipient. A member of the team duly responds, completing the form to the best of their ability (although some of the banking jargon requires clarification as it doesn’t relate to charitable activity). They also provide a “request for cash” document as these payment types hardly ever involve invoices (usually grant or donor agreements, employee contracts, or formal/informal “request for cash” documentation).

Following an unsuccessful attempt to speak to a Client Support team member for clarification via telephone, the charity returns the information via email. 24 hours pass without a response. The payment is still held, and the matter becomes even more desperate.

On the second day, the payment provider responds: “Thank you for the information. It has now been escalated for review; we shall contact you should we need further insight.” No expected timescale is provided on when there could be a response. It’s been nearly 4 days since the emergency payment was keyed.

24 hours later, the payment provider responds. “Thank you for the information. Our Compliance team has asked for an English translation of the ID supplied, plus section 2 of said compliance form requires further insight. Also, please supply any invoice that relates to this payment.”

Frustrated with the response, the charity immediately responded to the email, clarifying that there is no invoice that relates, this is an emergency aid payment, per the request for cash document. The charity then also reaches out to the beneficiary on the ground to ask for an English version of their government photo ID. The charity is concerned that their beneficiary may take some time to respond per their duties helping people in need of aid in a remote area with limited internet access.

Before this typical scenario has even played out to a conclusion, the charity has lost 5+ days in time just on the back-and-forth communication, the lack of support with the compliance asks, and their payment partners’ service level agreement model. So, how can these situations be avoided? IPT Africa feels that the following points showcase a best-practice approach to compliance-related queries for high-risk payments:

EDD Preparedness

Charities should expect these asks from their bank or financial service provider per their line of work. They must ensure that in the eventuality of an emergency payment need, they have the appropriate documentation to help reduce the pain of banking compliance questions.


Work proactively with your payment provider to find what might be asked for in the event of a high-risk payment compliance check. Ask to see copies of any Compliance forms and needs to ensure preparedness ahead of any payment activity.

Establish payment provider response time

Establish your payment provider’s Service Level Agreement on response times for payment queries at the point of onboarding. If they cannot accommodate the needs of a rapid response scenario for emergency or high-risk payments that your charity might face, find a partner that can.

Specialist Support Staff

Alternatively, ask if your provider can allocate specialist support staff and bespoke processes to accommodate your needs. Again, if this isn’t possible, find a partner that can.

Use the same information provided at the first payment

In the instance of repeat payment activity in high-risk jurisdictions, ask that your provider use the same information provided at the first payment point for every subsequent payment. This will reduce the need for your provider to ask the same questions every time a payment is made to the same beneficiary (note: charities should explain that they will proactively supply information around any changes in circumstance should they occur).

Next month, we’ll be talking about the process of opening an account with an international payments provider and if there are any efficiencies that can help smooth the application process.

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