London Daily

Focus on the big picture.
Thursday, Sep 18, 2025

Prepaid cards and the EU anti-money laundering directive

Prepaid cards and the EU anti-money laundering directive

Michael McDowell warned his fellow senators in February to think twice before rubber-stamping the EU’s latest anti-money laundering (AML) directive.
Even though Ireland was more than a year late in putting the directive on the statute books, a delay that is likely to cost €2 million in fines from Brussels, legislators wanted urgent action in the fight to prevent infiltration of the financial system by criminals and terrorists.

McDowell was worried, however, about special requirements in the directive for “politically exposed” people, including the denizens of Leinster House and their families.

He recounted how a bank that gave him a mortgage to build a holiday home 18 years ago is now citing AML requirements as the reason for requiring proof of the source of his personal wealth and that of his wife and children.

“Some of the forms we were asked to complete go far beyond what is reasonable,” he told the Seanad. “There must be some degree of proportionality as to the capacity of people to gather together all of these records, especially when they are in the 18th year of a 20-year mortgage.”

The requirement was “a nonsense”, he added, that did not serve “any useful purpose”.

Despite McDowell’s fears of regulatory overkill, Ireland signed the directive into law on March 18. Yet it has been only in the past two weeks that the full consequences of falling foul of AML regulations has come to general attention.

On May 13, the Central Bank of Ireland raised concerns about money laundering defences at PFS Card Services, triggering a suspension of trading in the shares of its Australian parent, EML Payments, followed by an immediate 40 per cent price collapse when trading resumed.

The regulatory intervention could temporarily halt PFS’s e-money operations throughout Europe, threatening about 27 per cent of EML’s group revenues and exposing it to a potential hostile takeover. The episode was a swift reversal of fortune for PFS, hailed as an Irish fintech success story only a year earlier when it was sold to EML in a deal worth up to A$341 million (€215.5 million) for its founders, Noel and Valerie Moran.

The growing alarm as news of the Central Bank’s action filtered back to EML’s headquarters in Brisbane can be sensed from filings made by EML with Australia’s ASX stock exchange last week. Because of the time difference, it was after midnight on Friday May 14 when senior management, including EML’s chief executive Tom Cregan, became aware of what was happening in Ireland. They spoke with PFS management at a hastily arranged 6:30am meeting, followed by urgent consultations with lawyers in Dublin later that day.

EML’s directors were briefed over the weekend and, after a dawn board meeting on Monday morning, they decided to request a temporary suspension of the company’s shares before the ASX opened for trading. The resumption of trading two days later sparked the investor rout that EML had tried to stall.

The Central Bank’s investigation continues, with PFS due to make a submission to the regulator by last Thursday.

Previous regulatory crackdowns by the Central Bank inflicted considerably less damage on the financial institutions whose AML precautions were deemed unsatisfactory. Investors in Bank of Ireland and AIB largely shrugged off AML fines of €3.15 million and €2.3 million respectively in 2017. These followed a fine of €3.3 million on Ulster Bank the previous year, and the Central Bank has also penalised money transfer provider Western Union and a number of credit unions over AML shortcomings.

The AML concerns are likely to centre on PFS’s core prepaid cards business, although neither the company nor the Central Bank will elaborate on the details of the regulatory concerns.

The risks posed by prepaid cards were well aired when the Dail debated the AML legislation last September. Frequently associated with gifting, prepaid cards also have more sinister uses, warned Fianna Fail’s James O’Connor, the Dail’s youngest TD.

“Fraud experts are increasingly concerned about the potential for abuse, from petty scams to money laundering by drug lords and terrorists,” he said. “The global market is anticipated to reach €3.5 trillion in value by 2022 and there is no sign of this trend stopping.”

Prepaid cards came to the attention of law enforcement in the 1990s when the Mexican drug cartel led by Joaquin Guzman, El Chapo, began using them as a cash alternative. They gained notoriety in 2015 and 2016 when terrorists used prepaid cards as an untraceable means of financing attacks in Paris and Brussels.
Newsletter

Related Articles

0:00
0:00
Close
Macron and his wife to provide 'scientific photographic evidence' that she is a real woman
US Tech Giants Pledge Billions to UK AI Infrastructure Following Starmer's Call
Saudi Arabia cracks down on music ‘lounges’ after conservative backlash
DeepMind and OpenAI Achieve Gold at ‘Coding Olympics’ in AI Milestone
SEC Allows Public Companies to Block Investors from Class-Action Lawsuits
Saudi Arabia Signs ‘Strategic Mutual Defence’ Pact with Pakistan, Marking First Arab State to Gain Indirect Access to Nuclear Strike Capabilities in the Region
Federal Reserve Cuts Rates by Quarter Point and Signals More to Come
Effective and Impressive Generation Z Protest: Images from the Riots in Nepal
European manufacturers against ban on polluting cars: "The industry may collapse"
Sam Altman sells the 'Wedding Estate' in Hawaii for 49 million dollars
Trump: Cancel quarterly company reports and settle for reporting once every six months
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
US Launches New Pilot Program to Accelerate eVTOL Air Taxi Deployment
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
Hong Kong Industry Group Calls for HK$20 Billion Support Fund to Ease Property Market Stress
Joe Biden’s Post-Presidency Speaking Fees Face Weak Demand amid Corporate Reluctance
Charlie Kirk's murder will break the left's hateful cancel tactics
Kash Patel erupts at ‘buffoon’ Sen. Adam Schiff over Russiagate: ‘You are the biggest fraud’
Homeland Security says Emmy speech ‘fanning the flames of hatred’ after Einbinder’s ‘F— ICE’ remark
Charlie Kirk’s Alleged Assassin Tyler Robinson Faces Death Penalty as Charges Formally Announced
Actor, director, environmentalist Robert Redford dies at 89
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
JD Vance Says There Is “No Unity” with Those Who Celebrate Charlie Kirk’s Killing, and he is right!
Trump sues the 'New York Times' for an astronomical sum of 15 billion dollars
Florida Hospital Welcomes Its Largest-Ever Baby: Annan, Nearly Fourteen Pounds at Birth
U.S. and Britain Poised to Finalize Over $10 Billion in High-Tech, Nuclear and Defense Deals During Trump State Visit
China Finds Nvidia Violated Antitrust Laws in Mellanox Deal, Deepens Trade Tensions with US
US Air Force Begins Modifications on Qatar-Donated Jet Amid Plans to Use It as Air Force One
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
Elon Musk Retakes Lead as World’s Richest After Brief Ellison Surge
U.S. and China Agree on Framework to Shift TikTok to American Ownership
London Daily Podcast: London Massive Pro Democracy Rally, Musk Support, UK Economic Data and Premier League Results Mark Eventful Weekend
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Musk calls for new UK government at huge pro-democracy rally in London, but Britons have been brainwashed to obey instead of fighting for their human rights
Elon Musk responds to post calling for the murder of Erika Kirk, widow of Charlie Kirk: 'Either we fight back or they will kill us'
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
USA: Office Depot Employees Refused to Print Poster in Memory of Charlie Kirk – and Were Fired
Proposed U.S. Bill Would Allow Civil Suits Against Judges Who Release Repeat Violent Offenders
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
French Debt Downgrade Piles Pressure on Macron’s New Prime Minister
US and UK Near Tech, Nuclear and Whisky Deals Ahead of Trump Trip
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
Anesthesiologist Left Operation Mid-Surgery to Have Sex with Nurse
×