Electronic Payment

Electronic Payment Process #

The investor’s KYC and accreditation are verified through 3rd-party identity verification and accreditation providers, ensuring the investor meets the necessary qualifications before the investment process can be finalized. This verification is a Securities and Exchange Commission (SEC) requirement and is critical before any financial transaction or wallet creation can occur.

Regulatory Compliance:

  • SEC Regulation S-ID (Identity Theft Red Flags Rule) mandates identity verification for financial transactions ( More on SEC Regulation S-ID).
    • Bank Secrecy Act (BSA) and FinCEN AML requirements apply to KYC and accreditation checks ( More on BSA). Reg D requires accredited investor verification under Rule 506(c) ( More on SEC Regulation D).

Fund Transfers & Compliance #

Once KYC and accreditation are confirmed, the platform securely initiates the transfer using the payment method authorized by the investor during the investment process. ACH payments may take 1-3 business days, depending on bank processing times, but certain providers may process payments instantly.

Regulatory Compliance:

Investor Relations & Transparency #

Once payment clears, the platform updates the investment status to reflect whether the payment was successful or unsuccessful. The investor receives a confirmation email notification, ensuring full visibility into the transaction process.

To enhance investor relations and transparency, we ensure that all fund data is clearly presented to investors at every step. Clearance and settlement processes involve managing counterparty risks, so we rely on trusted third parties to ensure transaction integrity.

Regulatory Compliance:

  • Reg A and Reg CF require investment transparency and reporting to investors.
  • FINRA Rule 2090 (Know Your Customer - KYC) ensures investment transparency ( More on FINRA Rule 2090).

Escrow & Investor Fund Protection #

Reg D requires investor funds protection by holding them in escrow during the campaign. By leveraging our escrow agent solution, we guarantee that funds are securely managed and processed, ensuring seamless operations even in challenging cases.

Regulatory Compliance:

  • SEC Rule 15c2-4 requires escrow for contingency-based offerings ( More on SEC Rule 15c2-4).
  • Funds in escrow must be held in a separate account to protect investors.

Email Notifications & Security Compliance #

Once transactions are complete, legally required email notifications are sent to investors. Our email-service integrates with a trusted delivery and marketing platform to ensure security, compliance, and deliverability. It includes robust encryption and regulatory compliance (FINRA), protecting sensitive financial data and minimizing phishing or email spoofing risks.

By adhering to SEC, FINRA, and BSA/AML standards, the platform ensures investor protection, secure fund transfers, and regulatory compliance.

Emails #

  • funding/funding_settled.pug - optional
  • funding/funding_failed.pug - optional

flowchart TD A[User authorized and provides payment info on Payment step] --> B(User confirms investment) B --> C([LAW REQUIRED EMAIL : CONFIRMED INVESTMENT]) B --> D{{Identity Verification}} B --> E{{Accreditation Verification}} D --> F{Approved?} E --> F F -->|No| G{{Investment Cancellation}} F -->|Yes| H(LEGALLY CONFIRMED INVESTMENT) H --> I{Transaction is initiated} I --> J[Transaction is failed] J --> K([EMAIL : TRANSFER FAILED]) I --> L[Transaction is processed] L --> M([EMAIL : INVESTMENT PAID]) J --> G

Notice: Provider Variability and Compliance Assurance

Please be advised that, depending on customer preferences, the specific providers involved in the investment and related processes, including identity verification, accreditation checks, electronic wallet provision, email communications, and other related services, may vary. However, rest assured that all such providers are carefully selected to meet the highest standards of security, compliance with applicable laws and regulations, and user experience best practices.

Each provider undergoes a rigorous vetting process to ensure they align with our commitment to safeguarding your personal and financial information. We prioritize full adherence to regulatory requirements, ensuring that your investment experience remains secure, compliant, and seamless.

Test Cases

All processes on our platform are thoroughly documented, including detailed test cases, which are especially critical whenever changes are made. Test cases ensure that every feature functions as intended, identify potential issues early, and maintain the platform’s reliability, security, and compliance for our investors.

Related Use-Cases:

Read more on the subject #

Calendar March 17, 2025
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