Regulatory Disclosures

Regulatory Disclosures under Art. 7a of the Swiss Banking Ordinance (BO)

Last update: 17 December 2023

A. Risks in international payment traffic

Disclosure of payment data

International payments and Swiss payments in foreign currencies are processed through correspondent banks. To enable such payments to be executed, 360pay ("originating PSP") may have to disclose information concerning the ordering customer ("originator"), the recipient ("beneficiary") and the payment order to correspondent banks and system operators involved in the payment, both in Switzerland (e.g., SIX Interbank Clearing AG) and abroad (e.g., EBA CLEARING SAS, SWIFT SC, etc.).

Information about the payment originator which is disclosed over a payment lifecycle includes the company name, address and account number (International Bank Account Number - IBAN), and may include the business activity, purpose, ownership structure, beneficial owners, organisational structure and number of employees. With regard to the payment order, disclosed information may include the reason for, and context of, the payment, any suspicious compliance-related factors, as well as details of other similar payments. It is also possible that entities involved in the payment may disclose payment data to regulators, authorities or other third parties in Switzerland or abroad. In addition, the payment beneficiary, whether in Switzerland or abroad, may receive information about the payment originator, or vice versa.

Correspondent bank risk

Similarly, the correspondent banks involved in the processing of a payment order are entitled to ask for additional information to understand a payment's background through a mechanism called Request for Information - RFI (here). In the event clear information from the payment originator is not forthcoming in a timely manner, correspondent banks may refuse (i) to execute the outgoing payment order (account debit) or (ii) to provide cover for an incoming payment (account credit).

Exchange rate risk

Exchange rate risk refers to the possibility of losses in international financial transactions due to fluctuations in the value of a given currency, in addition to foreign exchange controls put in place by third countries. For example, in the event of a return of a cross currency payment transfer (e.g., because the beneficiary's account was closed in the meantime) the ordering customer may carry a loss due to fluctuations in the exchange rate between the order date and return date.

Payment fraud risk

Payment fraud is the fastest-growing area of banking fraud, and corporate treasurers are disproportionately affected (here). Fraud poses particular challenges for payment service providers because it usually involves deception and confidence tricks (e.g., fake invoice scams, compromised business emails, social engineering attacks, CEO fraud). The resulting fraudulent transactions often evade a financial institution's fraud prevention mechanisms because the customer authorized the transaction herself/himself.

IT system failure risk

A system failure affecting a financial institution's external service providers, inter-banking networks, external communication networks or failures within the world-wide web may result in the impossibility to process a payment or provide timely account reporting. While due care was taken when selecting reliable integration partners, spill-over effects from downtime, outage, interruption, or unavailability of service beyond our control can never be ruled out entirely.

B. Deposit Insurance

In Switzerland, personal accounts (and legal entities) regardless of domicile benefit from deposit insurance in the amount of CHF 100'000 paid out within 20 days per customer and per bank in the event of (i) compulsory liquidation or (ii) any other type of bank closure.

Swiss deposit insurance first came into play on a large scale in October 1991, when Spar- und Leihkasse Thun, a Swiss regional lender, was shut down. The Swiss deposit insurance mechanism is only able to cover defaults of individual banks - it cannot mitigate major disruptions to the entire financial system.

Funds deposited with 360pay, once regulatory approval is in place, will be kept at the Swiss National Bank (SNB) and Tier-1 Swiss universal correspondent banks. They will not be covered by Swiss deposit insurance.