Case Study · Payments & Electronic Money
How a UK Licensed Payment Processor Embedded KYCsphere Sanctions & PEP Screening into its Core Payment Platform via API
A UK licensed electronic money institution integrated KYCsphere’s Sanctions Screening and PEP & Adverse Media APIs directly into its payment processing platform — automatically holding transactions on a match and resolving alerts inside KYCsphere before release.
100%
Transactions screened in real time against global sanctions lists and PEP sources at the point of processing
0
Manual screening steps — fully automated via API integration with the core payment platform
1
Centralised alert resolution workflow in KYCsphere before any held transaction is released
| Client | Confidential — UK Licensed Global Payment Solutions Provider |
| Headquarters | United Kingdom |
| Industry | Payments & Electronic Money |
| Regulatory Framework | FCA · UK Money Laundering Regulations · EU AML Directives |
| Integration Type | API Integration into Core Payment Platform |
| Tools Deployed | Sanctions Screening API · PEP & Adverse Media Search API · Alert Management |
The Compliance Obligation for Licensed Payment Processors
Electronic money institutions and payment processors operating under FCA authorisation are subject to stringent AML and sanctions compliance obligations under the UK Money Laundering Regulations and OFAC guidance. For a payment processor handling high volumes of cross-border transactions across multiple currencies and geographies, meeting these obligations in real time — at the point every transaction is processed — is both a regulatory requirement and an operational challenge.
Why Real-Time Screening at the Transaction Level is Non-Negotiable
Unlike a bank or investment manager that screens customers at onboarding and periodically thereafter, a payment processor must screen at the transaction level — every time a payment is initiated, the parties involved must be checked against sanctions lists and assessed for PEP risk before the transaction is allowed to proceed. A payment to or from a sanctioned individual or entity — even if that sanctions designation occurred after the customer was initially onboarded — must be caught and held before it is executed. This requires compliance screening to be embedded directly into the payment processing workflow, not run as a separate manual or batch process.
The API Integration Approach
Rather than operating KYCsphere as a standalone compliance application, this client required a deeper integration — embedding KYCsphere’s screening capabilities directly into their core payment processing platform via API. This meant every transaction processed by the platform would trigger an automated real-time screening call to KYCsphere, with the result determining whether the transaction proceeded or was automatically placed on hold pending compliance review.
Client Background
This UK-based global payment solutions provider operates under FCA authorisation and serves merchants and customers across more than 80 countries. It provides a range of B2B and B2C payment solutions — including an eWallet platform, cross-border payment processing, virtual IBANs, prepaid card issuance, and merchant acquiring services — serving customers and merchants across online gaming, travel, forex, and eCommerce sectors.
With a high volume of cross-border transactions processed daily across multiple currencies and jurisdictions, the firm needed sanctions and PEP screening to operate at the same speed and scale as its payment platform — embedded directly into the transaction flow rather than operating as a separate compliance process that could create delays or manual handling at volume.
The Challenge
The firm’s existing approach to sanctions and PEP screening was not designed to operate at transaction-level speed or scale — creating compliance gaps and operational risk as payment volumes grew.
Screening was not embedded in the transaction flow — sanctions and PEP checks were not integrated into the payment processing pipeline, meaning transactions could be processed before compliance screening had been completed — creating potential sanctions exposure on every payment.
No automated transaction hold mechanism — when a potential sanctions or PEP match was identified, there was no automated workflow to hold the transaction in place pending review — creating a manual, error-prone process that could not scale with payment volumes.
No centralised alert resolution workflow — match review and resolution was not managed in a structured, documented compliance workflow — making it difficult to demonstrate to the FCA and MFSA that every potential match had been properly assessed and a documented decision made before the transaction was released or rejected.
PEP screening relied on incomplete sources — with no officially published PEP lists maintained by any regulatory authority, screening against static commercial databases meant politically exposed persons — particularly local politicians, regional officials, and lower-ranking government figures — could go undetected at the transaction level.
Audit trail was fragmented across systems — without a single integrated compliance platform, maintaining a complete, auditable record of every screening decision across every transaction — ready for FCA and MFSA examination — was operationally unsustainable at scale.
The Solution — API Integration with Transaction Hold & Release
KYCsphere was integrated directly into the client’s core payment processing platform via API — embedding real-time sanctions and PEP screening into the transaction flow itself. The integration was designed so that every payment initiated on the platform triggers an automated screening call to KYCsphere before the transaction is executed, with the response determining whether the payment proceeds in real time or is automatically placed on hold for compliance review.
Sanctions Screening API
Every transaction triggers a real-time API call to KYCsphere, screening the sending and receiving parties against OFAC SDN, UN Consolidated, EU Sanctions, UK Sanctions, and other global watchlists — with lists sourced directly from regulators and updated as soon as published.
PEP & Adverse Media API
Transaction parties are screened in real time across thousands of authentic global news sources, government portals, regulatory announcements, and open-source intelligence feeds — identifying Politically Exposed Persons and adverse media findings as they emerge, not from static databases that miss local and regional officials.
Transaction Screening & Hold/Release Workflow
Step 1
Payment Initiated
→
Step 2
KYCsphere API Call
→
Step 3
Real-Time Screening
Sanctions · PEP · Adverse Media — screened simultaneously against live global sources
✓ No Match — Transaction Released
or
⚠ Match Found — Transaction Held
When a match is found — the transaction is automatically placed on hold in the payment platform
Step 4
Alert Created in KYCsphere
→
Step 5
Compliance Review & Resolution
→
Step 6
Release or Reject Transaction
All review decisions documented in KYCsphere — complete audit trail per transaction
How the API Integration Works
The KYCsphere Sanctions and PEP Screening APIs connect directly to the payment platform. Every time a payment is initiated, the platform sends the details of the transaction parties to KYCsphere in real time. KYCsphere screens those parties instantly against global sanctions lists and live PEP and adverse media sources, and sends back a result before the payment is executed.
If the screening result is clear — the transaction proceeds automatically with no interruption to the payment flow and no manual involvement required.
If a potential match is found — KYCsphere immediately signals the payment platform to hold the transaction, and automatically creates a compliance alert inside KYCsphere for the team to review. The transaction remains on hold until a compliance officer has assessed the match inside KYCsphere, documented their decision, and either cleared the transaction for release or rejected it. The entire review and resolution process happens within KYCsphere — giving the compliance team a consistent, structured workflow for every match, with a full audit trail maintained against the transaction record.
The Results
With KYCsphere’s Sanctions and PEP Screening APIs embedded directly into the payment processing platform, the firm now operates a fully automated, real-time compliance screening programme at transaction level — meeting FCA obligations without introducing manual handling or processing delays into the payment flow.
- Real-time screening on every transaction— every payment initiated on the platform is screened against global sanctions lists and live PEP sources before it is executed — with no manual steps, no batch delays, and no compliance gap between payment initiation and screening completion.
- Automatic transaction hold on any match— when a potential sanctions or PEP match is identified, the transaction is automatically held in the payment platform before execution — eliminating the risk of a sanctioned payment being processed while a manual review is pending.
- Structured compliance review before any release— every held transaction is reviewed and resolved inside KYCsphere’s alert management workflow before it is released or rejected — giving the compliance team a consistent, documented process for every match regardless of volume.
- PEP detection beyond static databases— because KYCsphere screens in real time across thousands of live global sources rather than static databases, the firm identifies PEP-connected transaction parties — including local politicians and regional officials — as designations emerge, not months after the fact.
- Complete audit trail per transaction— every screening result, alert, review decision, and release or rejection is logged in KYCsphere against the transaction record — giving the firm a fully documented compliance history ready for FCA examination at any time.
Need to Embed Sanctions & PEP Screening into Your Payment Platform?
KYCsphere provides Sanctions Screening and PEP & Adverse Media APIs designed for direct integration into payment processing platforms — with real-time screening, automatic transaction hold on match, and a structured alert resolution workflow built in.
