Block faces $765m DoJ settlement

Block, the parent company of Afterpay and Square, is nearing a $764 million settlement with the U.S. Department of Justice. The investigation focused on failures in the company’s anti-money laundering (AML) protocols and 'know your customer' (KYC) requirements. For retailers, this is a major signal that the honeymoon period for loosely regulated fintech is over. Federal regulators are scrutinizing how digital lenders and BNPL providers verify their users and monitor transactions. If you use Afterpay or Square for consumer financing, you don't need to panic, but you should expect changes. To comply with these legal pressures, Block will likely implement stricter identity verification steps during the checkout process. While this ensures a safer ecosystem, it could lead to slightly more friction for your customers during the application phase. The settlement also highlights the growing legal risks for tech-first lenders compared to traditional banks. As the Department of Justice tightens the leash on fintech giants, merchants should ensure their financing partners are fully compliant with federal law to avoid service disruptions.

Source: Finextra — Lending

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