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The PayrNet license revocation and why it needs PayRate42!

06-26-2023 04:39 PM CET | Business, Economy, Finances, Banking & Insurance

Press release from: PayRate42

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International and cross-border payments, along with neobanks, fintechs, and paytechs, are the infrastructural backbone of the CyberEconomy.

However, the lack of a harmunized cross-jurisdictional regulatory framework poses challenges in ensuring compliance within the industry. Lithuanian regulators' recent revocation of PayrNet's license has highlighted the importance of a reliable rating agency like PayRate42 to assess the credibility and compliance of payment processors, especially those operating in high-risk sectors.

Lithuanian regulators revoked the PayrNet license due to multiple violations of local laws, including breaches related to money laundering and terrorist financing prevention. PayrNet is part of the Railsr group (formerly Railsbank) of companies.

The PayrNet case is a wake-up call for the fintech industry. It illustrates the inherent risks of high-risk payment processors (HRPP) operating worldwide without a corresponding cross-jurisdictional regulation. The Lithuanian e-Money Institution PayrNet operated across the European Union and processed a transaction volume of €7.5 billion transaction volume in 2022.

A few months ago, the Bank of Lithuania barred PayrNet from acquiring new customers due to suspicions of severe money laundering violations. Since then, the company's financial position has become worse, and thus, it will apply to the court for the initiation of bankruptcy proceedings against the institution and intends to apply to law enforcement authorities.

The lack of a cross-jurisdictional regulatory authority overseeing the payments industry emphasizes the need for a comprehensive rating agency like PayRate42. With the rise of high-risk payment processors, it is crucial to have an independent organization that assesses, evaluates, and rates participants in the industry. PayRate42 provides transparency by enabling payment processor clients to submit listings, ratings, and reviews, giving them a voice in their dealings.

PayRate42 has been monitoring the case of PayrNet closely and has consistently warned against working with the company and its partners due to suspected money laundering activities and regulatory concerns. By actively identifying and highlighting these risks, PayRate42 helps safeguard the interests of businesses and individuals engaging with payment processors.

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Press contact: office@payrate42.com

Since its founding in 2021, PayRate42 has developed a rating for fintechs, paytechs, and their services. As a CyberRating agency, PayRat42 has paid special attention to compliance. In a traffic light system, we rate the providers of financial services. In addition, their customers can submit reviews and star ratings. With this multi-level rating system, we aim to make the CyberFinance environment safer for merchants and consumers.

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