BlueSnap Payment Services Ireland, a US-based payment services company operating in Ireland, has been fined €324,240 by the Central Bank for breaching European Union regulations related to customer fund safeguarding. The breaches occurred between January 2021 and December 2022, according to the regulator’s findings.
The Central Bank discovered that BlueSnap, which is authorized to provide merchant acquiring services, failed to deposit its customers’ funds into a designated safeguarding account. Additionally, the company mixed customer funds with its own, violating the EU’s Payment Services Regulations 2018. The company also delayed informing the Central Bank once it became aware that it was not adhering to the safeguarding procedures outlined in its original authorization application.
In response to the findings, the Central Bank stated that the failures stemmed from deficiencies in BlueSnap’s regulatory awareness and its understanding of reporting requirements. Moreover, the regulator pointed to inadequate oversight and monitoring of the company’s safeguarding operations.
BlueSnap, which facilitates payment processing for merchants, admitted to the violations and confirmed that it had taken corrective actions to resolve the issues. When a customer of BlueSnap makes a sale, the company is required to collect the payment, hold it securely in a segregated account, and then transfer the funds to the customer. Under EU regulations, payment service providers must ensure that customer funds are kept separate from the company’s own funds and are protected against misuse.
Seána Cunningham, Director of Enforcement and Anti-Money Laundering at the Central Bank, emphasized the importance of safeguarding customer funds. “Payment and e-money firms are authorized to hold and transfer money on behalf of customers, and at the core of this is a requirement for them to safeguard this money,” Cunningham said. “The Central Bank has made its supervisory expectations in this regard clear.”
Cunningham further stated that when firms apply for authorization, they must demonstrate how they will meet regulatory obligations. If their circumstances change, they must promptly inform the Central Bank and take necessary remedial action. In this case, BlueSnap’s failure to comply with its safeguarding obligations exposed its customers to significant risks, according to the Central Bank.
The fine and the regulatory action highlight the ongoing scrutiny of financial institutions operating in the EU, especially those handling customer funds.
