Result
A structure accepted by banks, PSPs and advertisers
A CPA network with annual turnover of about €1 million set up an operating company in the UAE (DMCC) and a Cyprus company for settlements with European advertisers. Framework agreements with advertisers and webmasters were signed, accounts were opened with payment providers, and a compliance framework for financial offers was put in place. No account freezes occurred after the restructuring, and the share of disputed and rejected leads fell to an acceptable level.
The client’s task
The network operated as an informal group: webmasters were paid through personal cards and cryptocurrency, advertiser terms lived in correspondence, and a payment provider had frozen funds twice. The client planned to move into EU/UK traffic and needed a structure that would pass checks by banks, payment providers and advertisers and allow lawful work with financial verticals.
Challenges and risks
- Classification of the activity. A network that only passes traffic is usually not carrying on a regulated activity. But if it influences promotional content or is paid for client deposits, questions of financial promotion and arranging arise in the UK and the EU.
- Banks and payment providers. They are cautious about CPA networks with financial and gambling traffic and expect a clear structure, webmaster KYC and an anti-fraud policy.
- Mass payouts. Payments to dozens or hundreds of webmasters in different countries mean sanctions screening, tax forms, VAT questions and a risk of blocked outgoing transfers.
- Liability for traffic. The network answers to the advertiser for lead quality and may answer to regulators and platforms for promotional materials distributed by its partners.
What we did
- Compared the UAE, Cyprus, Malta, Georgia, Bulgaria and Estonia on tax burden, substance requirements, bank access and reputation with payment providers. Chose the UAE + Cyprus pairing: the UAE as the operating hub, Cyprus for contracts and settlements with European advertisers.
- Prepared a contract package: an advertiser insertion order, an affiliate agreement with anti-fraud and clawback provisions, traffic rules and a ban on brand bidding without approval.
- Introduced webmaster KYC, sanctions screening and a payout policy, and prepared documents for banks and payment providers.
- Prepared a promotional-materials guide for financial offers and a procedure for approving creatives with the advertiser.
Facing a similar task? Tell us about it and we will reply within one business day.