Compliance and Legal Considerations

This section discusses the regulatory and legal framework surrounding gift card operations, focusing on compliance regulations, anti-money laundering (AML) rules, Know Your Customer (KYC) requirements, regional variations, and the role of AI in ensuring compliance.

Key areas to be explored include:

• Compliance Regulations Impacting Gift Cards: Review of U.S. regulations, the distinction between state and federal laws, EU Payment Services Directive, prepaid access classification, and necessary disclosure requirements.

• AML Rules and Gift Card Programs: Investigation into how gift card programs can be exploited for money laundering, the importance of purchase and load limits, reporting obligations, monitoring systems, and differences between open-loop and closed-loop systems.

• KYC in Gift Card Programs: Understanding legal requirements for digital identity verification, the applicability of KYC to buyers and recipients, handling strategies by program managers, and AI-driven verification systems.

• Regional Compliance Differences: Comparison of U.S. and EU expiration rules, GDPR's impact, challenges faced by multinational companies, cross-border risks, and regulations in emerging markets.

• AI in Compliance Operations: Examination of AI's role in automated compliance monitoring, interpretation of regulations, audit log analysis, real-time AML/KYC processes, and predictive risk assessment.