1. The Compliance Rating Framework
1.1 The Traffic Light Color Coding
PayRate42 has established a unique review and rating system, aptly termed CyberFinance, to assess financial service providers in the digital realm. We also subsume crypto services under the term financial services and therefore recommend their providers.
Our system utilizes a traffic light color coding to offer clear guidance for potential clients and partners:
- Green: Represents a provider with good standing and low risk.
- Orange: Indicates some concerns, posing moderate risks.
- Red: Signifies substantial concerns with high risks.
- Black: Black is used for companies acting illegally.
Our evaluation encompasses compliance, legal security, and transparency based on website information, regulatory warnings, customer reviews, and financial data.
1.2 Customer Reviews & Ratings
Furthermore, PayRate42 incorporates a secondary layer of assessment through customer reviews and star ratings, similar to Trustpilot’s model.
We believe this dual approach of professional compliance rating and customer feedback offers a comprehensive insight into financial service providers.
2. Compliance Criteria Guideline
2.1 Green Signal
| Green Signal | High Trust Level |
| Criterias | Description |
|---|---|
| Regulation | The financial services provider is authorized to conduct its business in the targeted regulatory regimes; |
| Website | The provider’s website, terms, and service agreements provide all necessary information (founder(s), legal entities, regulatory license/permissions, jurisdiction, social media); |
| Reviews | Not too many negative reviews, ratings, or comments on Trustpilot, Google, and other review & rating sites. |
2.2 Orange Signal
We include a financial services provider in our Orange Signal compliance list based on the following findings:
| Criterias | Description |
|---|---|
| Regulation | We could not establish that the provider has regulatory authorization for all jurisdictions in which it is offering its financial services. |
| Website | The website, terms, and services agreements do not provide the required information, and/or the information is difficult to find (founder, legal entity, license, jurisdiction & social media); |
| Reviews | Predominantly bad reviews and ratings on Trustpilot, Google, and other platforms. |
2.3 Red Signal
| Criterias | Description |
|---|---|
| Regulation | We found that the payment processor is not authorized to run its business; |
| Website | The website, terms, and services agreements do not provide the required information, and/or the information is difficult to find (founder, legal entity, license, jurisdiction & social media); |
| Reviews | Poor customer ratings and reviews and/or regulatory warnings against clients of the financial services provider, i.e., facilitates illegal business intentionally or by neglecting KYC/AML obligations. |
| Other | Founders and executives with a questionable track record (not fit and proper); |
2.4 Black Signal
| Criterias | Description |
|---|---|
| Regulation | regulatory warnings against the financial services provider and/or its client |
| Website | The website, terms, and services agreements do not provide the required information and/or provides misleading or false information |
| Reviews | Poor customer ratings and reviews and/or regulatory warnings against clients of the financial services provider, i.e., facilitates illegal business intentionally or by neglecting KYC/AML obligations. Reports of defrauding merchants. |
| Other | Founders and executives with a questionable track record (not fit and proper), Reports of defrauding merchants. |