BaFin Restricts High-Risk Business Activities Of Payone Over Money-Laundering Issues!

BaFin restricts business of payment processor Payone
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On July 26, 2023, the German regulator BaFin prohibited Payone from conducting transactions for certain business customers belonging to the high-risk portfolio due to high money laundering risks and serious deficits in money laundering prevention. BaFin has also ordered a ban on new customers in this area to prevent the e-money institution from being misused for money laundering.

The financial supervisory authority Bafin has identified deficits in the money laundering prevention of the payment service provider Payone. According to BaFin, the reason for the measures is high money laundering risks and “serious deficits in money laundering prevention.” This is likely to affect customers in high-risk sectors in particular.

Payone, with Managing Director Ottmar Bloching, is a joint venture of the Worldline Group and the DSV Group, the service provider of the Sparkassen-Finanzgruppe. DSV Group holds a 40% stake in the company.

According to the authority, during a special audit, which has not yet been completed, Payone was found to have “serious deficits in complying with and implementing the required enhanced due diligence obligations under the Money Laundering Act.” The authority found inadequate safeguards against money laundering. As a result, the payment service provider had built up a conspicuous high-risk portfolio in its e-commerce business segment, according to Bafin.

According to the announcement, the business customers of this portfolio are merchants who conduct their business almost exclusively online on websites. Consumers can pay there using credit cards, and Payone processes the credit card transactions. However, “findings from ongoing supervisory activities indicate that the merchants’ websites are linked to fraudulent subscriptions, phishing and fake stores, among other things.

The deficiencies relate to measures taken by the payment service provider to assess merchants’ business models as part of the customer acceptance process. Ongoing monitoring of merchants is also among the shortcomings, BaFin said. “In particular, the anomalies in the risk assessment by Payone GmbH did not lead to merchants being rejected or ongoing business relationships being terminated,” BaFin said.

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