Germany’s BaFin Appoints Special AML Monitor for PayOne Over Compliance Deficiencies

Germany’s financial regulator, BaFin, has appointed a special anti-money laundering (AML) monitor for PayOne, a leading payment service provider, citing persistent weaknesses in the company’s AML systems and compliance measures. In addition, PayOne has been ordered to increase its capital until it resolves the identified deficiencies.

The Frankfurt-based company, considered one of Europe’s fastest-growing payments businesses, came under scrutiny following multiple audits that revealed “serious deficits” in its compliance with Germany’s Money Laundering Act (GwG). BaFin stated that the deficiencies were found in “IT monitoring, risk assessment of business relationships and transactions.”

To ensure compliance, PayOne is now required to report regularly on its progress in addressing these issues. The special monitor will oversee the company’s adherence to enhanced due diligence obligations and supervise remediation efforts.

BaFin’s regulatory action follows previous enforcement measures against PayOne. In 2023, the regulator prohibited the company from processing transactions for certain high-risk business clients and banned it from onboarding new customers in this category. The decision came after significant AML failures were identified.

A special audit further revealed that merchants within PayOne’s high-risk portfolio were linked to illicit activities, including “fraudulent subscriptions, phishing and fake stores.”

By fLEXI tEAM