Regulator allows Prepaid Financial Services to sign up new customers

The Central Bank of Ireland has given permission for EML Payments to sign new customers for its Irish subsidiary, which has been subject to an investigation by the regulator.

Shares in the Australian fintech closed over 31 per cent higher after it announced the news.

EML said in a statement that the Irish regulator has also permitted PFS Card Services (Ireland) Limited to launch new programmes "within material growth restrictions on its payment volumes." The limitations could last for up to a year, it added.

The fintech said the regulator was also willing to continue to engage with the company on agreeing appropriate limits under its risk management and controls framework.

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The Brisbane-based group acquired PFS last year from Co Meath couple Noel Moran and Valerie Moran.

Shares in EML plunged almost 46 per cent in a single day on May 19th when the company said the Central Bank had raised concerns about the Irish unit’s “Anti-Money Laundering/Counter Terrorism Financing (AML/CFT), risk and control frameworks and governance”.

EML said at the time that the regulator might restrict the activities of the unit, which was responsible for PFS’s European business and accounted for 27 per cent of group revenues in the first three months of the year. The group clarified later in August that the Central Bank had not identified any instances of financial crime, AML or CTF events, nor deficiencies with respect to safeguarding, capital adequacy, or solvency measures.

EML told investors in early October that the Central Bank had raised issues about the Irish unit’s growth plans, which were “higher than what the Central Bank would want to see”.

The fintech, which recently also bought Kildare-based Sentenial, originally announced an agreement to acquire PFS in a deal valued at 453.6 million Australian dollars (€290.8 million). However, it subsequently secured a 189.1 million Australian dollars discount on the deal due to the impact of the Covid-19 crisis.