Frequently Asked Questions for Financial Institutions
What is PayQwick?
PayQwick is a BSA/AML and state law compliance-based electronic payment hub that enables state-legal cannabis commerce to transact throughout the entire cannabis supply chain, from seed-to-sale. PayQwick is a non-bank financial institution.
Is PayQwick licensed?
Yes. PayQwick is registered federally as a money service business and is a licensed as a money transmitter in each state in which it operates, unless state law does not require it to obtain a money transmitter license or it has received a written waiver from the applicable governmental agency overseeing financial institutions.
Does PayQwick have a BSA/AML compliance program?
Yes! PayQwick has the most robust BSA/AML Compliance Program in the U.S. custom tailored to the cannabis industry. PayQwick’s BSA/AML Compliance Program has been reviewed/approved by the FDIC, the NCUA, our partner financial institutions, government agencies who have issued our money transmitter licenses and our third-party compliance auditors.
What types of compliance does PayQwick perform?
PayQwick conducts extensive Know Your Customer (KYC) due diligence during the customer on-boarding process and continuously conducts Expanded Customer Due Diligence and Expanded Transaction Due Diligence throughout the year.
PayQwick strictly adheres to the FinCEN Guidance, dated February 14, 2014. PayQwick files all necessary Currency Transaction Reports (CTRs) and “Marijuana Limited,” “Marijuana Priority” and “Marijuana Termination” Suspicious Activity Reports (SARs). PayQwick also has developed a database of “normal and customary” activity so it can spot the “Red Flags” required by the FinCEN Guidance.
PayQwick conducts periodic on-site inspections of its customers to ensure the customer is operating in accordance with state law and is not implicating any of the eight enforcement priorities listed in the now rescinded Cole Memos.
What information does PayQwick share with financial institutions?
PayQwick shares all information needed by its financial institution partners to satisfy their BSA/AML and KYC obligations, including PayQwick’s on-boarding due diligence information, PayQwick’s periodic on-site inspection reports, monthly transaction volume reports, etc.
How does working with PayQwick affect the risks to my financial insitution from working with cannabis businesses?
Working with PayQwick actually reduces the risks faced by financial institutions electing to serve the cannabis industry. First, some financial institutions working with PayQwick do not open individual business accounts for cannabis businesses; the financial institution merely opens an account for PayQwick.
Second, financial institutions that elect to open accounts for individual cannabis businesses often require the cannabis business to have a PayQwick account so that the financial institution can take advantage of PayQwick’s KYC due diligence, Expanded Customer Due Diligence and Expanded Transaction Due Diligence.
In states where PayQwick picks up cash from cannabis businesses with an armored car, financial institutions are not faced with customers bringing large sums of cash into the branch for deposit. Instead, cannabis businesses transfer funds electronically from their PayQwick account to their account at the financial institution. Importantly, PayQwick has already filed a CTR and appropriate SAR with regard to these funds before they are transferred from PayQwick into cannabis business’ account with the financial institution.
Is PayQwick insured/bonded?
Yes. PayQwick maintains money transmitter bonds in each state as well as appropriate business operations insurance.
Are PayQwick’s funds counted as “cannabis” funds for purposes of calculating concentration ratios?
No. The FDIC has indicated that because PayQwick is an ancillary business in the cannabis industry, funds held in PayQwick’s account at a financial institution are not counted as “cannabis” funds for purposes of calculating a financial institution’s concentrations ratios.
Can PayQwick increase my financial institution’s profits?
Yes. By working with PayQwick, financial institutions enjoy increased deposits and increased non-depository income generated by a Joint Marketing Agreement that is customarily entered into between PayQwick and its partner financial institution.
Does PayQwick work with both banks and credit unions?
Yes. PayQwick works with both banks and credit unions.
If my financial institution is working with PayQwick, does my financial institution also have to open accounts for cannabis businesses?
No. Working with PayQwick entails only opening an account for PayQwick. Each Financial institution decides on a case-by-case basis whether and to what extent it wants to open accounts for cannabis businesses.