De-risking
De-risking is a bank’s decision to exit or refuse entire categories of client, rather than assess each business individually, in order to avoid the compliance cost of monitoring them. It is a portfolio-level policy, not a verdict on any single company.
A de-risking policy can close your account with no warning even if your file is clean, because the decision is made about your sector, not your business. Operators who plan for one bank alone typically lose 100% of their processing the day a policy shifts; a second live relationship keeps that number at roughly 50%.
Offboarding is a bank or acquirer’s process for closing an existing account, typically triggered by a compliance review, a policy change on the client’s sector, or a ratio breach, rather than a specific fraud finding.
Correspondent banking is the arrangement where one bank holds accounts for and executes payments on behalf of another bank, usually to reach currencies or jurisdictions the first bank cannot access directly.
Underwriting is the risk-assessment process a bank, EMI, or acquirer runs on an applicant before approval: verifying ownership, source of funds, transaction history, and sector-specific risk factors against the institution’s published or internal risk appetite.
A Merchant Category Code is a four-digit number card networks assign to classify what a merchant sells, used by acquirers and issuers to price risk and route transactions.