EML warns of growth hit due to possible Central Bank actions

Regulator is investigating EML’s Irish subsidiary, which it acquired last year

Australian group EML Payments has warned that plans to grow its business in Europe could be stymied as a result of possible orders from the Central Bank of Ireland in relation to its Irish unit, where the regulator is looking into anti-money laundering and counter-terrorism concerns.

In an update to investors, EML said the financial regulator had informed the fintech that its “material growth policy” was “higher than what the Central Bank would want to see”.

It added that the regulator had proposed that limits be applied to EML’s prepaid programmes, which could have a negative impact on the business, it said.

EML was due to present plans to the Central Bank that include a detailed analysis of limits applied across almost 27,000 of its programmes, along with a proposed recalibration of limits for some of these.


The Central Bank warned EML in May it was considering taking action against Trim, Co Meath-based PFS Card Services (Ireland) Ltd, which is part of Prepaid Financial Services (PFS), a company that the Australian group bought last year in a deal worth up to £186.5 million (€216.2 million).

PFS was founded by Noel and Valerie Moran in London in 2008. It became one of Europe’s largest issuers of emoney, with a presence in 25 countries by the time it was sold, and has bases in Trim, Malta, London and Manchester.

The Central Bank’s concerns relate to anti-money laundering and counter-terrorism financing matters, risk, control frameworks and governance at PFS Card Services (Ireland).

EML, which is in ongoing talks with the regulator on a remediation plan to address its concerns, said possible restrictions on its activities could be more limited than originally envisaged. However, the fintech added it still expected to be told to make changes that would hurt future growth.

“As presently framed, EML considers that the directions could materially impact the European operations of the PFS business,” it said.

Costs and provisions

EML has already incurred costs and provisions of more than Aus$11 million (€7 million) to date in relation to the Central Bank’s investigation into its Irish unit, which accounted for 27 per cent of group revenues in the first three months of 2021.

Its share price slumped by 46 per cent, wiping Aus$850 million off its market value in May when the investigation was first announced.

The fintech originally announced an agreement to acquire PFS in a deal valued at Aus$453.6 million. However, it subsequently secured a Aus$189.1 million discount on the deal due to the impact of the Covid-19 crisis.

EML last month received approval from French and British regulators to acquire Kildare-based Sentenial for an upfront enterprise value of €70 million, and an earn-out component of up to €40 million.

Charlie Taylor

Charlie Taylor

Charlie Taylor is a former Irish Times business journalist