WHY SIZE MATTERS IN THE CONTEXT OF RISK AND COMPLIANCE
R I S K L E V E L
PROCESS STEPS
LARGE MERCHANTS
SME MERCHANTS
Large merchants tend to have audited financials, compliance department, public information Distressed smaller merchants with limited oversight are more susceptible to fraud than larger, Consumer fraud can less easily detected at larger merchants that have lots of transactions (transparency issue) The outstanding balances with large merchants are material and usually more concentrated, SME are run like a portfolio of risks, less risk management needed during the lifetime established players with governance structures
high
KYC/AML
low
Merchant Fraud
high
low
Consumer Fraud
low
high
Counterparty Credit Risk
low
high
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