Cross-border payments company found to have deficiencies in its customer due diligence procedures and transaction monitoring for iGaming partners

The Danish Financial Supervisory Authority (Finanstilsynet) has ordered payment provider Inpay to temporarily stop onboarding new business partners in the iGaming sector.

Following a money laundering inspection in March, the Authority found Inpay to have breached the country’s Anti-Money Laundering Act due to insufficient customer due diligence procedures and transaction monitoring in the iGaming sector.

Headquartered in Copenhagen, Inpay is a Danish e-money institution licensed under the Payments Act, whose business model primarily consists of facilitating cross-border payments for business customers within online gaming, who are typically located outside Denmark and often outside the EU. 

According to the Danish FSA, this customer group constitutes a significant part of the company’s total transaction volume, with partners including 888, Betsson, NetBet, Lottoland, LiveScore and Delasport, among others.

The violations concern insufficient implementation of customer due diligence procedures when a customer’s relevant circumstances change, as well as a failure to assess the purpose and intended nature of the business relationships, in relation to business customers within online gaming who are classified as high risk for money laundering and terrorist financing. 

In addition, the Authority found that Inpay does not conduct sufficient ongoing monitoring of its business customers within online gaming, and does not have insight into deposits from the gaming providers’ end users, which overall increases the risk that the company can be used for money laundering or terrorist financing. 

“The Danish FSA assesses that the violations are serious, and the extent, type of customer, including the complexity of ownership structures and activities across many countries, are aggravating factors for how significant the violation is,” said the Authority.

The Danish FSA concluded that it is not appropriate for Inpay to establish new business customer relationships within online gaming before the company has documented to the Authority that the serious violations have ceased.

Inpay has confirmed to the Authority that it has voluntarily ceased establishing any new business customer relationships within online gaming.