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Mandatory Withdrawals - Effective July 9, 2014

 

In order to comply with financial regulations and the policies of our service providers, merchants cannot accept payments to a WePay account for more than 30 days without completing Know Your Customer (KYC) information and providing a means to settle funds.  

 

How are my merchants affected?

  • Accounts created on or after July 9, 2014 must complete Know Your Customer (KYC) information and provide a way to settle funds within 30 days of their first payment.  If they do not, then WePay will stop accepting new transactions until the information is received.  In addition, after 30 days, WePay will begin contacting the merchant to encourage provision of the information.

  • Accounts created before July 9, 2014 are not yet required to comply with this rule.  It will only impact accounts created after 7/9.  WePay will publish a schedule for full compliance in the near future.  WePay encourages partners to get ALL merchants to complete KYC and settlement info to avoid any interruption in transaction acceptance.

What do my merchants need to do?

 

The clock begins for new merchants when they receive their first payment (not when they sign up).  If we do not have KYC and settlement information, then after 30 days from the first payment we will stop accepting new payments. Your merchants have three options for settling their funds:

 

1. Verify KYC and Bank Account Information

The easiest way for your merchants to receive their funds is to enter in their KYC information and link a valid bank account. Funds will automatically be withdrawn to their accounts on the schedule that they choose.

 

Once a merchant has submitted KYC and settlement information, this information must continue to be accurate.  If we detect subsequent inaccuracies,  WePay will alert you and / or the merchant, based on your merchant communication preferences.  Merchants have 30 days to correct the problem from detection.  If at 30 days, the problem has not been corrected, no new payments will be accepted.

 

2. Request Settlement By Check

If your merchants do not want to link their bank accounts, they have the option of requesting a paper check instead. After July 9, if a merchant elects to receive settlement via paper check, WePay will automatically send that merchant a check once a month for their entire balance.  

 

In addition, we currently allow the merchant to designate the payee of a check.  Going forward, the name on the check will automatically be the name setup in KYC.  The address field will be prefilled with the KYC information but can be edited by the user (new info subject to verification by WePay).

 

3. Specify a Beneficiary

We understand that some partners allow a merchant to raise money that is meant to go to someone else.  WePay has new functionality to support this scenario.  Partners can provide information up front on both the ultimate beneficiary and the person organizing on behalf of the beneficiary.  

 

WePay still requires that the ultimate beneficiary provide KYC and settlement information within 30 days of the first payment.  If the beneficiary is unable to provide info within 30 days, the organizer can elect to take responsibility for the funds and fill out KYC and settlement info in their own name.

 

What does my platform need to do?

 

WePay requires that merchants provide KYC and funds settlement information as soon as possible after receiving their first payment.  

 

For platforms that prefer WePay interact directly with your users:

Once a merchant has received a payment, WePay will regularly remind merchants via email to complete KYC and set up a settlement method (roughly every 2 days) until the information is submitted.  We may include warnings about cessation of payments.  

 

For users that are currently using on-demand settlement via check, we will email them advising them that this will convert to an automatic, monthly process and encourage them to settlement to a bank account.

 

For platforms that prefer to manage all communication with their users:

WePay will provide status on accounts that require KYC/settlement info in 2 ways:

  • Through the API

    • Accounts will be in state “action_required”.  In addition, a new /account parameter indicates how long until an account will be unable to accept transactions.

  • Through WePay.com’s reporting: the application dashboard account report will include the same information

 

WePay recommends the following communication with your merchants.

  • Include notice that KYC/settlement info is needed in every communication once a merchant receives a payment - in their payment notices, and in any other emails

  • Include notice when users log in to their account on the platform

 

WePay.com will be including an alert on login as well.

 

If, after 30 days from receipt of the first payment, merchants have not entered the required information, WePay will contact them directly to inform them that they are no longer able to accept payments.

 

Why is this required?

 

Financial regulators are becoming stricter about how private companies like WePay handle other peoples' money.  By forcing withdrawal after 30 days, WePay eliminates any uncertainty about whether WePay is acting like a bank or some other regulated entity.  This way, WePay can continue to offer streamlined setup and rapid disbursements to merchants, and a flexible API to platforms.

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