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- EML Payments (EML) share price is spiking after the company announced long-awaited good news for its embattled Irish subsidiary, PFS Card Services Ireland (PCSIL)
- The Central Bank of Ireland (CBI) today confirmed it would permit PCSIL to sign new customers and launch new programs within “material growth restrictions”
- However, the financial regulator says it will impose a material growth limitation over PCSIL’s total payment volumes for 12 months, though this could be rescinded earlier
- In May, the Central Bank of Ireland raised “significant” concerns about PCSIL’s counter-terrorism financing governance
- Following today’s news, EML shares are up 25 per cent at $3.44 each at 12:41 pm AEDT
The EML Payments (EML) share price has spiked today after the company announced some long-awaited good news for its embattled Irish subsidiary, PFS Card Services Ireland (PCSIL).
While EML’s Irish prepaid card services arm is certainly not out of the woods just yet, the ASX-listed fintech company today announced mostly positive developments in ongoing correspondence with the Irish financial regulator around anti-money laundering and counter-terrorism financing (AML/CTF) concerns that were first flagged in May of this year.
Specifically, the Central Bank of Ireland (CBI) today confirmed it would permit PCSIL to sign new customers and launch new programs within “material growth restrictions” imposed upon the Irish business. It’s a significant development for EML considering its Irish subsidiary brought in around 27 per cent of the group’s total revenue during the first quarter of 2021.
The CBI added that it would not impose broad-based reductions in limit controls on PCSIL programs.
“The CBI is satisfied to continue to engage with PCSIL with a view to agreeing to appropriate limits under its Risk Management and Controls Framework,” EML said.
Nevertheless, the financial regulator said it would impose a material growth limitation over PCSIL’s total payment volumes for 12 months. These limitations could be lifted earlier, however, once EML’s remediation plan is successfully implemented and verified by a third party.
Today’s news bodes well for EML Payments given the CBI in October was looking to potentially limit PSCIL’s pre-paid card programs. EML chief executive Tom Cregan said at the company’s latest annual general meeting the company had set aside $11.5 million for its remediation plan, advisory services, and potential fines.
EML today said it believed it would meet its obligations under the remediation plan.
“The remediation plan is on track. PCSIL is committed to meeting the timelines as
established by the PCSIL Board and the EML Board,” the company said.
In May, the Central Bank of Ireland raised “significant” concerns about PSCIL’s AML/CTF governance. The news sent EML shares tumbling over 40 per cent in one day.
Shares took another beating in October when Ireland’s Central Bank said it was looking to limit PCSIL’s pre-paid card programs.
EML said the issues with its Irish arm had no impact on its Australian, North American and UK operations, but it was still significant for the company given Ireland’s contribution to its bottom line.
Following today’s news, EML shares were up 25 per cent at $3.44 each at 12:41 pm AEDT. The company has a $1.3 billion market cap.
