Together with Fintelegram: In our recent investigation into unlicensed online casinos and gambling platforms, Fintelegram discovered that the Swedish fintech giant Klarna, regulated as a bank through its subsidiary Sofort, is increasingly being utilized as a payment processor. This finding echoes a report Fintelegram published a few weeks ago. What raises eyebrows is that Klarna‘s foray into the controversial gambling arena contradicts Fintelegram’s previous stance of rejecting merchants from this sector on ethical grounds.
Processing Payments For Unauthorized Gambling Platforms Klarna works with Payabl to process payments to illegal gambling sites Individuals who sign up with these illicit casinos are able to deposit substantial amounts through various payment processors, including Klarna, with minimal to no Know Your Customer (KYC) checks. Fintelegram found that Klarna often employs Paybl‘s payment gateway for these transactions. Payabl is a licensed payment processor in Cyprus known for its activities in the high-risk payment sector, such as online gambling and adult entertainment.
During payment processing on online platforms, Payabl is identified as the merchant, suggesting possible concealment of the actual illegal gambling merchant (screenshot left for a transaction at Casinoly).
Klarna‘s involvement via Sofort extends to many online gaming entities such as Casino Infinity, PlayZilla, Boomerang Casino, Casinoly, and PowerBet. These platforms operate illegally within the EU and other regions and process customer payments through Cypriot payment agents like Estolio Limited.
Furthermore, these operators lack proper licensing and fail to conduct essential KYC checks, allowing deposits of thousands of euros without verifying the customer’s identity or address. This laxity is also evident in transactions made through Klarna.
Klarna clarified in an October 2021 blog post that its Buy-Now-Pay-Later (BNPL) feature would not be available for use on gambling sites. Yet, it seems to be engaging with merchants in the gambling sector, raising questions about its involvement with illegal gambling entities.
This is a risky territory for Klarna, as it potentially exposes Fintelegram to money laundering risks associated with illegal gambling activities.