In a significant regulatory development, Lithuania’s central bank has levied a €3.5 million ($3.83 million) fine against fintech giant Revolut for shortcomings in its anti-money laundering (AML) protocols. The penalty, announced yesterday, follows a routine inspection that revealed deficiencies in Revolut’s monitoring of business relationships and operations, leading to inadequate identification of suspicious transactions.
Revolut, which operates in the European Union under a Lithuanian banking license, responded by emphasizing that the investigation did not uncover any confirmed instances of money laundering. The company stated that the findings pertained to enhancements needed in existing controls and affirmed its commitment to regulatory compliance. Revolut has cooperated with Lithuanian authorities to promptly address the identified issues.
This fine marks the largest ever imposed by Lithuania’s central bank, reflecting the gravity of the violations and the substantial revenues of Revolut Holdings Europe, the entity overseeing the company’s regulated operations within the European Economic Area. Notably, Revolut was valued at $45 billion in August 2024 and reported a record pre-tax profit of £438 million ($559.5 million) in 2023.
Revolut and Visa Challenge Proposed UK Interchange Fee Cap
In another regulatory arena, Revolut has joined forces with Visa to contest the UK Payment Systems Regulator’s (PSR) proposal to cap cross-border interchange fees. The PSR’s review highlighted that, following Brexit, the absence of the EU’s cap allowed Mastercard and Visa to increase fees significantly, resulting in additional costs of £150-200 million annually for UK businesses. The regulator is considering implementing an interim cap and has invited feedback until February 7, 2025.
Both Revolut and Visa argue that the proposed caps could stifle competition and hinder innovation within the fintech sector. They contend that such regulatory measures might lead banks to reduce rewards programs or introduce new fees to offset revenue losses, ultimately impacting consumers. Visa expressed concerns that artificial controls on interchange do not reflect the commercial realities of today’s market and could negatively affect the value businesses and consumers derive from card payments.
As Revolut navigates these regulatory challenges, the outcomes could have significant implications for its operations and the broader fintech landscape in Europe.
