regulation - a warning

[kewlnet]

hello

i feel it my sad duty to inform everyone that paypal, and services like them, are, unless they have an e-money issuers certificate, or are otherwise properly regulated, acting unlawfully and are leaving themselves open to prosecution (according to the EU and the FSA).

we, at kewlbrits.co.uk limited, recently found this out whilst looking into setting up our own service.

being based in the united kingdom, we naturally approached the FSA(Financial Services Authority), only to be told that we needed a 'small e-money issuers certificate', which we could apply for (free of charge) to themselves - without it, they said, we would be operating illegally.

those already operating (yes, even if they are based in the USA) without such a certificate or proper regulation, are considered outlaws by the FSA.

whats more, we needed to be regulated in every country wherein we did business.

ok, said we, what are the conditions of this certification?..

and here we get to problem..you see the good old european union chaps(or chapess's) who came up with this brilliant piece of red tape totally forgot about online payment processors, and in doing so, ensured that, if the conditions were to be met, no-one wishing to operate a la paypal (including paypal) would be able to qualify for a certificate..

yet the good old EU have insisted that we become regulated through this certificate if we want to do business..

sadly, a few certificates have been issued to UK companies - but this still leaves a few of them open to prosecution unless they change their operations -
as these in no way properly satisfy the criteria demanded to gain a certificate.

what is more, the companies are not really properly regulated, no checks are made -instead, a report has to be forwarded to the FSA every 6 months.

the alternative is to go for full regulation - in the UK applications cost around £2000 and more a pop.. no refunds..and theres still more money to pay out every year if your application is successful.

so, if anyone was thinking of buying one of the scripts currently doing the rounds, or taking over a payment processor..think on.

anyone currently operating - make sure you are properly and fully covered in every country where you market your service.

and anyone looking to open an account with any payment processor - check they are fully and properly regulated/certificated before you do business with them.


all the best

adie douglas-close
kewlbrits.co.uk limited.