The Chief Justice of the High Court has upheld a €324,240 fine imposed on the Irish unit of US fintech company BlueSnap after the Central Bank of Ireland found it failed to comply with security requirements.
An application to uphold the fine was made to Judge David Barniville on Wednesday by Claire Hogan, counsel for the Central Bank.
The Bank found that BlueSnap Payment Services Ireland Ltd, a subsidiary of US company BlueSnap Inc, breached the requirements of the European Union (Payment Services) Regulation 2018 between January 2021 and December 2022.
BlueSnap provides its customers with the ability to accept payments for goods and services in multiple jurisdictions and currencies.
The central bank, in a settlement notice issued after the enforcement action against BlueSnap, said the retention of funds “is an important regulatory protection” for users accessing services like those offered by BlueSnap.
Under European law, service providers are required to ensure that customer funds are held in segregated accounts for data protection purposes for the “sole purpose of holding user funds” and must not be mixed with the company’s own funds or those of third parties.
In April 2021, BlueSnap notified the Central Bank that its customers' funds had not been credited to the special safeguard account but had instead been held in UK accounts in the name of another BlueSnap group entity.
In February 2022, BlueSnap reported further breaches of security measures to the Central Bank, including allowing customer funds from other BlueSnap group entities to be processed through its Irish security accounts.
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A subsequent investigation by the Central Bank found that BlueSnap delayed informing the bank once it became aware of the failure to comply with the security procedures outlined in its application for authorisation as a payment institution.
As a punishment, the Central Bank issued a reprimand to the company and imposed a fine of €463,200. A 30 percent discount was applied to the fine in accordance with the settlement agreement.
Judge Barniville upheld the fine, noting the punishment was not “manifestly disproportionate”.
Earlier this week, the Central Bank received a similar decision from the High Court, upholding a fine of €393,512 against Waystone Fund Management (IE) Ltd.
Sourse: breakingnews.ie
