Case Study · Money Services & Cross-Border Remittance
How a US Licensed Money Services Business Uses KYCsphere to Screen Remittance Transactions to India
A US licensed Money Services Business integrated KYCsphere’s Sanctions Screening API and Alert Management into its remittance processing platform — screening every transaction against global sanctions lists in real time before funds are transferred.
12
Countries covered by the firm’s cross-border remittance network
100%
Remittance transactions screened against global sanctions lists before processing
1
Manual sanctions screening steps — fully automated via API at the point of each transaction
| Client | Confidential — US Licensed Money Services Business (MSB) |
| Headquarters | United States |
| Industry | Money Services & Cross-Border Remittance |
| Regulatory Framework | FinCEN · Bank Secrecy Act (BSA) · State Money Transmitter Licence · RBI MTSS · FATF |
| Integration Type | API Integration into Remittance Processing Platform |
| Tools Deployed | Sanctions Screening API · Alert Management |
The Compliance Obligation for Money Services Businesses
Money Services Businesses (MSBs) operating as licensed international money transmitters in the United States are subject to stringent AML and sanctions compliance obligations under the Bank Secrecy Act (BSA), FinCEN regulations, and OFAC sanctions rules. For a cross-border remittance operator processing high volumes of transactions across multiple international corridors, meeting these obligations at the transaction level — screening every sender, receiver, and related party before funds are transferred — is both a federal regulatory requirement and an operational necessity.
Why Sanctions Screening at the Transaction Level is Non-Negotiable for MSBs
Unlike financial institutions that screen customers periodically, MSBs must screen at the point of every individual transaction — because remittance customers are often occasional senders whose sanctions status may have changed since their last transaction. OFAC requires that any transfer of funds to or from a sanctioned individual, entity, or jurisdiction be blocked and reported — regardless of whether the customer passed a previous check. This means sanctions screening must be embedded directly into the remittance processing workflow, running in real time before each transaction is executed, not as a batch process after the fact.
The MTSS Framework and RBI Compliance
This firm also operates under the Reserve Bank of India’s Money Transfer Service Scheme (MTSS) — the regulatory framework governing inward cross-border remittances into India. The MTSS framework requires that all participating Money Transfer Operators follow strict KYC and AML norms, including sanctions screening of all transaction parties before funds are credited to beneficiary accounts in India. As an MTSS-authorised operator, the firm is required to screen against both US sanctions lists and comply with RBI AML guidelines — making real-time API-based screening the only operationally viable approach at the transaction volumes the firm processes.
Client Background
This US-based Money Services Business is a licensed international money transmitter operating under FinCEN registration and state-level money transmitter authorisation, as well as under the Reserve Bank of India’s MTSS framework. It provides cross-border remittance services across 12 countries — with India as its primary corridor — serving the Indian diaspora community in the United States through a combination of branch offices, agent networks, and a digital remittance platform.
The firm processes remittances through multiple payout channels in India — including direct bank transfers, cash collection at agent locations, and e-wallet credits — with a network of more than 15,000 agent payout points across India giving beneficiaries convenient access to funds. As a FATF member country operator, the firm is required to follow strict KYC and AML norms on every transaction it processes — screening the sending party, the receiving party, and any relevant intermediaries against global sanctions lists before any transfer is executed.
The Challenge
Processing a high volume of cross-border remittance transactions daily — across multiple payout channels and geographic corridors — made manual or batch sanctions screening operationally unsustainable and created significant compliance risk under both FinCEN and RBI MTSS obligations.
Sanctions screening was not embedded at the transaction level — without API-based screening integrated into the remittance platform, there was no mechanism to screen every transaction and its parties against current sanctions lists before the transfer was initiated — creating potential OFAC exposure on every remittance processed.
Transaction volumes made manual screening unscalable — with high daily transaction volumes across multiple corridors, manually screening each sender and receiver against OFAC SDN and other lists before processing was not operationally viable — creating a compliance gap that grew with transaction volume.
RBI MTSS obligations required pre-transfer screening — the RBI MTSS framework requires that all transaction parties be screened before funds are credited to beneficiary accounts in India. Without automated pre-transfer screening, meeting this obligation consistently across all transactions was extremely difficult to demonstrate to regulators.
No structured hold and review workflow for flagged transactions — when a potential sanctions match was identified, there was no automated workflow to hold the transaction, create a structured compliance alert, and route it for documented review — creating a risk that flagged transactions could be processed before a proper compliance decision had been made and recorded.
Audit trail was incomplete across transactions — without a centralised screening and alert management record per transaction, maintaining a documented, auditable compliance history ready for FinCEN or RBI examination was operationally difficult to sustain at scale.
The Solution — API Integration with Transaction Hold & Release
KYCsphere’s Sanctions Screening API and Alert Management module were integrated directly into the firm’s remittance processing platform — embedding real-time sanctions checks into the transaction flow and providing a structured, documented workflow for reviewing and resolving any match before a compliance decision is made. The integration ensures that no transaction is executed until the sending party, receiving party, and any relevant intermediaries have been checked against current global sanctions lists — with the API returning a real-time result that determines whether the transaction proceeds or is automatically held and routed to the compliance team via KYCsphere’s Alert Management workflow.
Sanctions Screening API
Every remittance transaction triggers a real-time call to KYCsphere’s Sanctions Screening API — screening the sender, the beneficiary, and any related parties against OFAC SDN, UN Consolidated, EU Sanctions, UK Sanctions, and other applicable global watchlists. Sanctions lists are sourced directly from regulatory authorities and updated as soon as any new designation is published — ensuring every transaction is always screened against the most current data with no lag between a new designation and its inclusion in the screening check.
Alert Management
When a potential sanctions match is identified on any transaction, KYCsphere automatically creates a risk-rated alert and routes it to the compliance team for review inside KYCsphere’s Alert Management module. The compliance officer reviews the match details, assesses whether it is a genuine hit or a false positive, documents their decision, and either clears the transaction for processing or blocks it — with the complete review and decision trail logged against the transaction record in KYCsphere.
Remittance Transaction Sanctions Screening & Alert Workflow
Step 1
Remittance Initiated
→
Step 2
KYCsphere Sanctions API Call
→
Step 3
Real-Time Screening
Sender · Beneficiary · Related Parties — screened against OFAC, UN, EU & HM Treasury lists
✓ No Match — Transaction Processed
or
⚠ Match Found — Transaction Held
When a match is found — the transaction is held and a risk-rated alert is raised in KYCsphere for compliance review
Step 4
Alert Created in KYCsphere
→
Step 5
Compliance Review & Decision
→
Step 6
Process or Block Transaction
Full screening result and documented compliance decision logged against each transaction record
How the Integration Works
The KYCsphere Sanctions Screening API connects directly to the remittance platform. Every time a remittance is initiated, the platform sends the sender and beneficiary details to KYCsphere in real time. KYCsphere screens both parties instantly against all applicable global sanctions lists and returns a result before the transaction is executed.
If the screening result is clear — the remittance proceeds automatically with no interruption to the payment flow and no manual compliance step required before processing.
If a potential match is found — KYCsphere immediately signals the platform to hold the transaction before any funds are transferred, and automatically creates a risk-rated alert in KYCsphere’s Alert Management module. The compliance officer reviews the match inside KYCsphere, documents their decision, and either clears the transaction for processing or blocks it — with the complete review trail maintained against the transaction record and available for regulatory examination at any time.
The Results
With KYCsphere’s Sanctions Screening API and Alert Management integrated into its remittance processing platform, the firm now operates a fully automated, real-time sanctions compliance programme at transaction level — meeting FinCEN, OFAC, and RBI MTSS obligations without adding manual compliance overhead to the remittance processing flow.
- Real-time sanctions screening on every remittance— every transaction is screened against current OFAC, UN, EU, and UK Sanctions lists before funds are transferred — with no manual steps, no batch delays, and no compliance gap between transaction initiation and screening completion.
- Automatic hold on any sanctions match— when a potential sanctions match is identified, the remittance is automatically held before any funds move — eliminating the risk of a sanctioned transaction being processed while a compliance review is pending.
- Structured alert and review workflow for every match— every held transaction generates a risk-rated alert in KYCsphere’s Alert Management module, giving the compliance team a consistent, structured process for reviewing and documenting every match — whether a genuine hit or a false positive — before any decision is made.
- RBI MTSS pre-transfer screening compliance— every remittance to India is screened before funds are credited to beneficiary accounts — meeting the RBI MTSS requirement for pre-transfer sanctions checks consistently across all transaction volumes.
- Complete audit trail per transaction— every screening result, alert, compliance review decision, and processing outcome is logged in KYCsphere against the transaction record — giving the firm a fully documented sanctions compliance history ready for FinCEN or RBI examination at any time.
Running a Remittance or Money Services Business?
KYCsphere’s Sanctions Screening API and Alert Management integrate directly into remittance and payment platforms — providing real-time transaction-level screening, automatic holds on any match, structured compliance review workflows, and a complete audit trail for FinCEN and OFAC compliance.
