Question:
Is it plausible that the surge of FinTech startups over the past decade is entirely unrelated to the rise of Broker Scams? Where do these astonishing “new” payment traffic volumes, used by FinTech startups to dazzle their investors, actually originate? Only the naive would assume that such volumes stem solely from legitimate sources. Sure, they might hold that belief. However, regulatory authorities have a duty to be skeptical—that’s their role. So, where do the transaction volumes and explosive growth rates of companies like WireCard, Payvision, Moorwand, MoneyNetInt, or Bruc Bond (formerly Moneta International) truly come from? FinTelegram aims to explore this question in the upcoming series, Growth Wonder FinTech.
Industry insiders are well aware that the expansion of most FinTech startups operating in payment processing largely stems from what is classified as high-risk industries—such as adult entertainment, online gambling, and fraudulent schemes. While pornography and gambling may carry moral stigma, they do not inherently involve deception. Scams, on the other hand, are built entirely on deceit. According to the U.S. FBI, binary options fraud alone has the potential to siphon off as much as $10 billion annually from retail investors.
For FinTech firms involved in this sector, the financial losses suffered by retail investors effectively translate into their transaction volumes. In high-risk industries, Payment Service Providers (PSPs) earn substantial commissions—sometimes as high as 20%. At the same time, these PSPs frequently turn a blind eye to thorough KYC (Know Your Customer) and AML (Anti-Money Laundering) checks, enabling their “merchants” to operate through offshore entities. They follow the Three Wise Monkeys Strategy—hear nothing, see nothing, and ask nothing. Just let it happen.