The Australian Transaction Reports and Analysis Centre (AUSTRAC) has issued a letter to the online payment platforms sector, warning businesses to tighten their controls to prevent payments for child sexual exploitation.

The warning comes after a supervisory campaign easily identified a number of customers suspected to be making payments for child sexual exploitation.

AUSTRAC’s regulatory operations team found issues across the sector, with low suspicious matter reporting, poor transaction monitoring and clear failures to identify and manage high-risk customers.

AUSTRAC has directed WorldRemit to appoint an external auditor, sent letters of concern to five businesses, and is currently investigating several others.

AUSTRAC CEO Brendan Thomas said the campaign focussed on detecting child sexual exploitation activities within the customer base of several online payment platform businesses.

Payment platforms provide services for customers to transfer funds to overseas recipients.

Many of these businesses are registered with AUSTRAC as remitters. They generally have sophisticated technology platforms and operate entirely online.

Around 90 payment platforms operate in Australia with around 50 also registered with AUSTRAC as remitters. All are regulated by AUSTRAC under the AML/CTF laws.

The largest payment platforms report more international funds transfers than the big banks – including to high-risk jurisdictions for child sexual exploitation.

Offenders usually make frequent low value transfers between $10 and $500, applying benign labels such as ‘school uniform’ or ‘medical costs’. Often offenders have a history of travel to high-risk jurisdictions.