MLRO for Payments and E-Money Firms: The Experience the FCA Looks For
At a payments or e-money firm, the MLRO is one of the first people the FCA assesses at authorisation and one of the first it calls when something goes wrong. Transaction volumes are high, onboarding is fast and financial crime risk moves quickly, so the experience that works at a bank or a wealth manager does not always transfer. This guide explains the MLRO’s legal position at a payments firm, what the role involves, the experience profile that holds up, and whether the role can be fractional.
Where the MLRO Sits at a Payments Firm
Authorised payment institutions and e-money institutions are authorised under the Payment Services Regulations 2017 and the Electronic Money Regulations 2011, not as Part 4A FSMA firms. That means the Senior Managers and Certification Regime does not apply to them in the same way, and the MLRO does not hold the SMF17 designation. But the obligations behind the role are just as real.
Payments and e-money firms are within the Money Laundering Regulations 2017. They must appoint a nominated officer to receive internal suspicious activity reports and decide whether to report to the National Crime Agency, and, where appropriate to their size and nature, a senior person responsible for compliance with the regulations. In most payments firms, one person does both: that is the MLRO. The FCA assesses that person closely at authorisation and expects to be told about changes. Our guide to the people the FCA expects at authorisation covers the wider team.
If your group also has FSMA permissions, for example a consumer credit or investment business, the MLRO of that firm holds SMF17. See the MLRO role explained.
What the Role Involves
The core of the job is the same as at any regulated firm: owning the firm’s anti-money laundering framework, making suspicious activity decisions and reporting to the board. At a payments firm, it also usually includes:
- Transaction monitoring at volume. Setting rules and thresholds, tuning them to reduce noise without missing risk, and managing alert backlogs.
- Digital onboarding. Customer due diligence for customers who never meet the firm, including electronic verification, document checks and enhanced due diligence for higher-risk customers. See CDD and EDD explained.
- Merchant and business customer risk. For acquirers and business payment providers, understanding what merchants sell and spotting when activity does not match.
- Sanctions screening. Screening customers and payments in real time, with a manageable false positive rate. See sanctions screening false positives.
- Fraud. Authorised push payment scams, account takeover and money mules sit right next to money laundering, and the MLRO needs a clear line with the fraud team.
- Agents, distributors and partners. Overseeing agents and e-money distributors, and the banking partners and card schemes that set their own financial crime expectations.
- The business-wide risk assessment and annual report. See the business-wide risk assessment and the annual MLRO report.
The Experience Profile That Holds Up
The MLROs who succeed at payments and e-money firms usually have:
- Direct payments or e-money experience. They have worked with payment flows, card schemes, safeguarded funds and agents, and understand how money moves through the firm’s products.
- Transaction monitoring depth. They have designed or tuned monitoring rules, not just reviewed alerts, and can explain the trade-off between coverage and noise.
- Experience of growth. They have kept financial crime controls in step with a fast-growing customer base, and can describe what broke and how they fixed it.
- Regulator and banking partner experience. They have handled FCA information requests or a period of close supervision, and responded to a banking partner’s financial crime review.
- Technology fluency. They are comfortable working with product and engineering teams, specifying requirements for monitoring and screening systems, and reading data.
- Judgement and confidence. They make suspicious activity decisions quickly and defensibly, and can stop a customer, product or partner when they need to.
Qualifications such as the ICA Diploma in Anti Money Laundering or ACAMS certification help, particularly for a first MLRO role, but they are not a substitute for this experience. Our guide to MLRO interview questions shows how to test it.
Warning Signs in a Candidate
- Experience only in traditional firms with low transaction volumes.
- Alert review experience but no involvement in designing monitoring rules.
- Vague answers on suspicious activity reports they made or decided not to make.
- No view on how fraud and money laundering controls should work together.
- Little understanding of what banking partners and card schemes expect.
Scenario: An e-money institution has grown its customer base quickly through a partnership with a consumer app. Its MLRO, a capable generalist, is spending every day clearing alerts. A banking partner’s review finds weaknesses in transaction monitoring. The firm hires an interim MLRO with e-money experience to retune the monitoring rules and clear the backlog, then appoints a permanent MLRO and a financial crime analyst. The original MLRO moves to a deputy role focused on onboarding.
Should the MLRO Also Be the Compliance Officer?
At an early-stage payments firm with modest volumes, one person often covers both compliance and the MLRO role. As volumes grow, financial crime work tends to take over, and most firms split the roles. Our guides to sizing the financial crime team and the compliance officer for fintech and payments firms explain how firms usually structure it, and head of financial crime or MLRO covers the split in larger teams.
Can the MLRO Be Fractional?
Yes, at the right stage. A fractional MLRO can work well before authorisation and in the first year afterwards, while volumes are modest. The firm needs a named alternate to receive internal reports on the days the MLRO is not working, and the MLRO needs enough time to keep monitoring tuned and reports flowing. As transaction volumes grow, a full-time MLRO, often with a deputy, becomes the norm. See our fractional MLRO page and how many days a fractional MLRO needs.
Timing for Authorisation
If you are applying for authorisation or registration, recruit the MLRO before the application is finalised. They should help design the controls the application describes, and the FCA will want to understand who they are and what they have done. A strong, named MLRO is one of the clearest signals of readiness an application can give. Our authorisation support page explains how we help.
Pay
MLROs with payments and e-money experience are in demand and sit at the upper end of the ranges in our salary guide. Equity is often part of the package at venture-backed firms, and interim MLROs with payments experience command a premium day rate.
Related Services and Guides
Financial crime leadership for payments and e-money firms. Every search is run by our specialist team, with Adrian Lawrence FCA overseeing each mandate
MLROs
Permanent, interim and fractional.
→ MLRO recruitment → Fractional MLROMLRO jobs →
Payments and Fintech
Leadership for payments firms.
→ Payments and fintech recruitment → Fintech compliance officersPeople for authorisation →
Financial Crime Teams
The people around the MLRO.
→ Financial crime leadership → Do you need a deputy MLRO?Sizing the team →
The Rules
What the MLRO owns.
→ Safeguarding explained → SARs and the nominated officerBusiness-wide risk assessment →
Every search is run by our specialist team, with Adrian Lawrence FCA overseeing each mandate
Frequently Asked Questions
Is the MLRO at a payment institution an SMF17?
No. Payment and e-money institutions are not within the SMCR in the same way as FSMA firms, so their MLRO does not hold SMF17. They still need a nominated officer under the Money Laundering Regulations, and the FCA assesses the MLRO closely.
What experience matters most for a payments MLRO?
Direct payments or e-money experience, transaction monitoring design, and experience of keeping controls in step with growth.
Can a payments firm use a fractional MLRO?
Yes, at an early stage with modest volumes, provided there is a named alternate for internal reports and enough time for the role.
Who handles suspicious activity reports when the MLRO is away?
A named deputy or alternate, trained and authorised to receive internal reports and make decisions. Every payments firm needs one, and it matters most when the MLRO is fractional.
When should a payments firm hire its MLRO?
Before the authorisation application is finalised, so the MLRO can help design the controls it describes.
About the Author
Adrian Lawrence FCA is the founder of SMF Capital. He is a Chartered Accountant and Fellow of the ICAEW, holds a practising certificate in his own name, and is a former listed-company Finance Director with a BSc from Queen Mary College, University of London. He founded FD Capital in 2018 and has since built a network of five specialist recruitment practices. He oversees every SMF Capital search. View Adrian’s ICAEW profile.
Hiring an MLRO for a Payments or E-Money Firm?
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Adrian Lawrence FCA is the founder of SMF Capital and a Fellow of the Institute of Chartered Accountants in England and Wales and holds an ICAEW practising certificate in his own name. He holds a BSc from Queen Mary College, University of London, and has over 25 years of experience working with boards, investors and business owners across the UK. He founded SMF Capital to help FCA and PRA-regulated firms appoint the Senior Managers the regulators expect, with the fit and proper assessment built into every search, and oversees every Senior Manager Function search.