13 november 2020
07:12
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An attempt to keep up with fintech specialist Adyen turns out to be an expensive and embarrassing flop for ING.
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Two years ago ING had
350 million euros have been put on the table for Payvision, a Dutch fintech company that enables retailers to be paid by their customers in the most diverse ways.
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At the time, it was ING’s largest acquisition since the financial crisis, but according to then CEO Ralph Hamers it was a very strategic deal. It success of the Dutch ‘unicorn’ Adyen proved how lucrative the booming market for online payment processing can be. With Payvision ING hoped to be able to respond to that trend.
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In the meantime, the takeover of Payvision has turned into a disillusionment, Het Financieele Dagblad reports Friday. The payment company had been on the radar of the American money laundering watchdog FinCEN and several American banks for years because it processed suspicious transactions from customers who could not end up in the traditional banking circuit. It turns out from the so-called FinCEN Files, reports made by banks to FinCEN and investigated by ICIJ, a consortium of investigative journalists around the world.
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Pornhub
It should come as no surprise that PayVision was on the radar of banks and regulators. For years, the company served clients from the porn and gambling industry, two sectors that are often excluded by the classic banks because they are susceptible to fraud. At the same time, employees of other major banks such as Deutsche Bank or Bank of New York Mellon had already warned five years before ING Payvision took over against the way the payment company works.
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Payvision cut large transactions into small amounts for no apparent reason. In just a few months, tens of millions were transferred to customers such as the porn site Pornhub, says Het Financieele Dagblad. Allied Wallet, which was fined in the US for investment fraud and pyramid schemes, also did business.
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Last month, the Austrian NGO EFRI labeled Payvision as ‘the Dutch Wirecard’.
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The European Funds Recovery Initiative (EFRI), an Austrian NGO that defends victims of cybercrime, called Payvision the Dutch version of Wirecard this week. That German payment giant capsized earlier this year after mega fraud. EFRI filed a complaint with the Dutch central bank for money laundering and is seeking damages of 7 million euros for customers who have been victims of binary options fraud which would have been facilitated by Payvision.
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Meanwhile, ING is so upset with Payvision that last month it sold the most profitable portfolio of the payment company, the porn customers, for 1 million euros to the previous owner. Just over a month earlier, ING had already written off EUR 188 million in goodwill on Payvision. That is more than half of what the bank originally paid for Payvision.
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ING says it has now dismissed the most risky customers. Payvision’s porn client portfolio was recently sold for 1 million to the previous owner of the payment company.
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In a response to the Dutch newspaper, ING confirms that it has now closed its high-risk customers at Payvision. Customers who did not immediately find an alternative payment processor were given the time to look for a new one.
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ING also says it maintains its confidence in Payvision and believes it can still play a strong role in the online payments market. More and more business customers are also paying online. And in addition, new customers have a much lower risk profile. The depreciation of 188 million euros also has nothing to do with the doubts about customers, but according to the bank is a consequence of the corona crisis.
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:quality(80)/cdn-kiosk-api.telegraaf.nl/f039657e-2580-11eb-8601-0255c322e81b.jpg "André Rieu doubts the survival of company | Entertainment")