Citizens for ACH?

[chadwhitacre]

http://www.citizensbank.com/commercial/automated-clearing-house-ach.aspx
http://www.citizensbank.com/commercial/accessglobal-ach.aspx
https://www.citizensbank.com/commercial-banking/banking-needs/electronic-payments.aspx

[chadwhitacre]

I called the 877 number and apparently we don't have the right type of account(?). They're having someone else call me back. I think I'm going to stop in the local office to talk with my contact there.

[chadwhitacre]

Called my contact at Citizens' local office and she's looking into this for me.

[chadwhitacre]

"There's an underwriting process, it's not an instant sign-up."

[chadwhitacre]

Local contact has me in the system and I'm waiting for a call from the next level up.

[chadwhitacre]

Just had a call with the next level up. She's going to get me a pricing sheet in the next day or so but sounds like they're offering 20¢ per. I did specify that we want to upload NACHA files programmatically and I think she took that on board (good look on recommending we make that explicit, @sbrendtro). I also emphasized that we're only doing credits, and aren't asking to be underwritten for debits at this point (maybe in the future). Seems to be moving along!

[sbrendtro]

As you get talking to more technical people at Citizens, you'll want to get a hold of their specifications for file transmission, file confirmations, and their NACHA format guide. The NACHA format itself is standard, but each bank seems to like to customize the values transmitted in some of the fields. And the file confirmation format is completely different for each bank. All of this information will be needed to build an OpenACH bank plugin specific to Citizens.

[chadwhitacre]

Meeting next Thursday at 10am to discuss.

[chadwhitacre]

Per #3390 (comment), ask Citizens about bank transfers outside the U.S.

[sbrendtro]

FYI, international ACH transfers are available through side banks, but to
my knowledge the country lost no longer includes Euro countries since 2009
and the introduction of SEPA payments. The transfers could likely be done
via:

1. Bank wire (FedWire) - expensive
2. SEPA - needs euro bank relationship
3. OCT transactions to debit cards (direct to card loads) - Citibank does
   these and probably others, but not sure who. Read more here:
   https://developer.visa.com/vpp/documents/json/Original_Credit_Transaction__OCT_.html
   On May 9, 2015 8:57 PM, "Chad Whitacre" notifications@github.com wrote:

Per #3390 (comment)
#3390 (comment),
ask Citizens about bank transfers outside the U.S.

—
Reply to this email directly or view it on GitHub
#3366 (comment)
.

[chadwhitacre]

Thanks @sbrendtro. I believe Citizens is owned by RBS, so they may be able to help us with a European bank account that we could use for SEPA. I'll ask about that on Thursday.

[chadwhitacre]

Reticketed from https://github.com/gratipay/gratipay.com/pull/3408/files#r30277011: ask about any temrs of service for end-users and language to use to incorporate their terms of service into ours.

[chadwhitacre]

Meeting went well. Lots of info but I'm running hard on #3415. We should see a proposal tomorrow, will need to make a decision tomorrow to make this happen in time (guy is on vacation next week, needs to get the ball rolling before he leaves).

[chadwhitacre]

I pulled the trigger on this. It'll be an adjustment because the fee structure and API are more complicated. One interesting development: we'll have access to 25 countries via IAT (cf. balanced/balanced-api#44). We've actually had no fee on payouts since Balanced made an exception for us as an early adopter. Given the more complicated fee structure here, it'll take some work to figure out how we're going to pass that through; reticketed as #3443.

[chadwhitacre]

• their proposal for the "file gateway" (sftp/scp, supposedly)
• an alternate proposal for their web-based system
• their IAT guide (28 pp.)
• the list of countries for IAT (in PPT, natch)
• their NACHA format guide

I told him we would move forward with the file gateway proposal, except for Achieve Access ($50/mo). Not having Achieve Access means:

• We have to phone in control totals vs. using a web+securid-based system.
• We have to monitor our account every day for ACH debit fraud. We have 24 hours to report fraud. With Achieve Access we would get to approve all ACH debits, whitelist, and set caps.
• Direct transmissions should be under dual control, of course.
• We should look into ACH/cyberattack insurance.

Should I ask him to add Achieve Access after all?

[chadwhitacre]

I've said yes to Achieve Access at $25/mo. I've named @clone1018 as the secondary employee for dual-control purposes (after a short phone call with Luke).

[chadwhitacre]

To: Citizens

As you know, Gratipay's risk profile is actively changing right now, and we're doing our best to assess and respond to these changes quickly and carefully. Here is our risk management program as it stands today, which includes our AML program:

http://inside.gratipay.com/howto/manage-risk

We would welcome a conversation with Citizens' underwriters to further discuss any questions or issues related to our risk program.

Thanks, []!

[chadwhitacre]

From: Citizens

Thanks Chad
We’ll be sure to update you with any feedback as soon as we get it. I anticipate [] and I will re-group with the AML and underwriting group now that we have those items they were most interested in to complete their due diligence.

To: Citizens

Thanks, []. After spending time with this over the weekend, I'm confident we can find a way forward together. I look forward to speaking with you on our Thursday call if not before, and I look forward to your decision to proceed!

[chadwhitacre]

@clone1018 Will you be able to join our weekly call at 11:30 AM US/Eastern today?

[clone1018]

Sure, @whit537 it's in an hour right?

[chadwhitacre]

@clone1018 Yes, but actually, game off. I got a call this morning that we've been rejected.

[chadwhitacre]

The two reasons Citizens cited for rejecting us were:

• We might be a "money exchanger," because we support bitcoin. We don't support bitcoin under the new TOS, and we took it off the FAQ in Removed mention of Bitcoin. #3429. I'm guessing they saw bitcoin addresses listed on profiles.
• We don't do sanction screening, which is true. Reticketed as do sanction screening inside.gratipay.com#239.

I was speaking with a salesperson who was proxying about eight risk officers from an internal email thread. "You've even attracted the attention of the regulations and compliance department, which sits above AML." I've asked if we could have a conversation with one or more risk officers to understand their concerns, since that will be helpful in approaching PNC (#3518). Citizens went public last year, and that doesn't make them less skittish. The salesperson referred to "finable offenses," and in particular transactions involving sanctioned parties. It was unclear to me whether the identity of the sender or the receiver was the thing that mattered (cf. Transpay at #417 (comment)).

Also, they noticed that Kiberpipa is in Slovenia. "Are they a registered charity? How do they know?" cc: @silverhook @domenkozar :)

[domenkozar]

We're an NGO. No such thing as charity here, you can just upgrade NGO status into "public benefit" (means just less taxes), which we're in process now-ish.

[silverhook]

TL;DR: we’re a registered NGO NPO and currently in the process of gaining the status of an association in public interest (equivalent to the common law charitable organisation).

We fall under the Societies Act as „društvo“ (“association”), which is as @domenkozar mentioned by definition (in said act) a non-government, non-profit organisation, based on volunteer work and with a voluntary membership.

LUGOS’ statute in §8 sets forth as our main activities:

• organising social activities for computer users and mutual help;
• education (organising courses, conferences and workshops);
• spreading GNU/Linux into academic and educational organisations, as well as educating potential users everywhere where computers are being used;
• publishing all sorts of publications on how to use Unix, Linux and applications for them (lately this is mostly videos online, but the first Slovenian book on GNU/Linux was also authored by LUGOS);
• translating and localising certain parts of GNU/Linux, where justifiable and where the need and demand from users arises;
• fight against the monopoly on the Slovenian IT market regarding operating systems.

We are currently in the process of gaining the status of „društvo v javnem interesu“ (“society in public interest”), which is the local (perhaps even civil law) equivalent of a charitable association. For this there are some stricter rules you have to meet. We do, but so far never bothered to apply. Once we get the status, the entity and everything stays the same, just in the public registry we hold that additional status.

[chadwhitacre]

Thanks for the info, @silverhook @domenkozar. I'm afraid it's too late for this round, but it looks like collecting that kind of info could be important for the next round.

[chadwhitacre]

To: Citizens

Thanks for your hard work on our behalf, and I'm sorry it didn't come together. I wanted to follow up with an email to address the feedback I heard from you, [], about Gratipay's risk program:

• We may be regulated by FinCEN. We rewrote our terms of service a month ago specifically to fit the payment processor exemption to the definition of a money transmitter (31 C.F.R. § 1010.100(ff)(5)(ii)(B)). We stopped processing payments under our old terms of service and are rebuilding our customer base from scratch under our new terms. We are well aware of the issues here, and I can confidently say that we are not a money services business and are not regulated by FinCEN.
• We process bitcoin. In fact, we do not process bitcoin. We allow our users to list a bitcoin address on their public profile, but we do not use the address to directly facilitate any transactions on their part. We specifically removed this functionality when we rewrote our terms and started rebuilding our user base.
• We do not perform sanction screening. This is true. However, we are happy to add this to our risk program, both for existing and future customers.

I understand that this is too little, too late, but I wanted to at least clear up for the record the misconceptions about our MSB status as well as bitcoin. Thanks again for all your hard work, and best wishes.

[chadwhitacre]

From: Citizens

Thank you for your email – I will keep this on file in the event we try to form a business relationship in the future.

It’s been a pleasure meeting you – I hope you find a good fit for ACH services for your company soon so that your business isn’t interrupted. In the event I hear about your accounts needing to close I will let you know but you may get a letter in the meantime.

[chadwhitacre]

I got a call from our Citizens account rep, and this letter in the mail: