Glossary term
Transaction Laundering
Using a legitimate merchant account to process payments for undisclosed third parties or prohibited goods, hiding the true nature of the transactions.
Transaction laundering occurs when a legitimate merchant account is used to process payments for activity the processor never approved — an undisclosed third party, a different product line, or a prohibited category hidden behind a compliant-looking storefront.
A common pattern in the creator economy is a creator who presents an innocuous public profile — recipes, art, tutorials — while directing buyers of prohibited goods to pay through that same profile. The on-platform storefront looks clean; the real transaction is for something else entirely. The discrepancy between the declared business and the actual activity is the defining feature.
This is difficult to catch with content moderation or a surface-level scan, because the prohibited activity is deliberately kept off the visible storefront. Detecting it requires connecting on-platform profiles to off-platform signals — where inbound traffic originates and where outbound links point — to surface the mismatch.
This definition is provided for general educational purposes and is not legal or compliance advice.
Related terms
Link Graph
The network of inbound and outbound links connected to a creator's presence, used to surface off-platform risk signals a content scan cannot see.
Evidence Graph
A structured map of on-platform and off-platform signals about a creator, used to reach and defend a payout risk decision with a full audit trail.
Prohibited Business List
A payment processor's published list of business categories it will not process payments for, such as piracy, counterfeit goods, or unlicensed regulated products.
Merchant Category Code (MCC)
A four-digit code classifying a merchant's business type. An inaccurate code can misrepresent risk and create compliance exposure for acquirers.