PAYMILL / CYBERservices Europe S.A in Trouble
We have a few clients we have created stores for and we were shocked on Monday when we started receiving emails from a few of the store owners that they received emails from PAYMILL who are part of the Klik & Pay Group. The email stated the following:
Unfortunately since the evening of 23rd of July several merchants are having issues with processing credit card transactions.
After initially expecting a technical issue we can now confirm that technically our system is working as expected.
CYBERservices Europe SA for their acquiring is temporariliy suspended following a decision of CSSF the Luxembourg banking authorities.
All merchants related to this acquirer can currently not process any credit card transactions.
SEPA transactions as well as PayPal and transactions to other acquirers are not affected.
We are currently moving the affected accounts to different acquirers in order to resolve this issue for you.
In some cases it might be needed to sign an additional contract in order to be active as soon as possible.
When that is the case for you, then we will get back to you once this is available.
The email go's on with some pre written questions and answers most importantly I think for many stores is this one:
Q: Is my money secure?
A: The money from the processed transactions is hold on a trustees account and is secure.
More worrying is this one:
Q: I cannot make a refund anymore. What to do?
A: Unfortunately due to the suspension the acquirer can neither perform transactions nor refunds at the moment. In urgent cases please consider making a direct wire transfer from your bank account to the end customer.
Yes they are actually saying to many of the people we have spoken to that they cant guarantee you will receive your next card settlement payment, only CSSF can advise you. But they are also saying you should go ahead and refund customers from your own money. How can stores refund their customers, with what money PAYMILL? you guys have it!
Having spoken to a few retailers both on and off shopify that we work with, some are saying that PAYMILL are offering little help or information with regards to money's which have been paid by their customers or which are being held in reserve by PAYMILL. Some have been told that they would have to contact the CSSF in order to receive their next card settlement payments. Many have emailed the CSSF and no one to our knowledge is yet to receive a reply.
I am wondering just how big this is? because we are talking about 4 or 5 retailers that we know of first hand who are effected by this and are being left in limbo not know if their next card settlement is going to be paid or indeed if they will ever see the money that is being held in reserve again.
Can anyone who is affected by this get in touch with me by posting below so that we can share information about what is being done, what is working and what isn't working for you?
I am happy to discuss what actions we have taken so far to recover our partners money, either here (so it helps everyone) or in PM.
To make things a little clearer.
Our partner is the company who own an online store and used PAYMILL to process card payments.
Paymill is a company registered in Germany and is part of the Cyberservices Group, they seem to handle onboarding/sales/service.
Cyberservices Europe SA is the acquiring bank/financial arm in Luxembourg who hold the actual funds from the card payments.
Klik & Pay is part of the Cyberservices Group and are the front end, web panel that stores log into to check the payments, settlements, chargeback and reserves etc.
The CSSF is like the FCA in US, they are the financial conduct authority in Luxembourg.
We were getting no response from Klik & Pay or the CSSF and so we took to Twitter and hassled the CSSF until they provided us with some information for contacting them and we had a name for point of reference of the director Mr Claude Marx.
We contacted the CSSF and they requested the original contract between the company and Cyberservices Europe SA and a screen print from Klik and Pay showing the total amount of funds currently "stuck" in their bank accounts which we sent to firstname.lastname@example.org
The first contract PAYMILL sent over was no good as it was not signed by Cyberservices Europe SA and so we went back to PAYMILL and requested the signed copy which they provided after 4 days.
We then resent the signed contract and the screen print showing the total balance our partner is currently out of pocket by.
I dont know why but we were expecting some kind of flood gate to open and the money be released to our partner, this couldn't be further from what happened. Instead they received an email from the CSSF quoting an awful lot of legal jargon but basically saying.
Thanks, we now officially acknowledge you as a creditor of Cyberservices Europe SA then stating what we know already that they have frozen all accounts and the ability for the company to trade and then and this is the kicker.. sorry but we do not have an estimate of how long this whole process may take, literally they have no idea how long our partners money will be held. Cyberservices Europe SA have to demonstrate that they will continue to operate within the confines of their financial legislation before the seizure is lifted.
In the meantime our partners funds sit in an account (apparently safe) unable to be moved or accessed by them.
To be honest I find the fact that the CSSF can operate in such a capacity which might effect innocent businesses in what seems to be purely collateral damage absolutely shocking. If Cyberservices Europe SA have been running their business in a way not deemed to be lawful in the eyes of the financial conduct authority in Luxembourg how are the CSSF behaving any differently by bankrupting innocent businesses in the process of their investigation. It is simply not right, the debate is not whether or not funds held belong to these innocent businesses the debate is to do with the operation of the business by Cyberservices Europe SA and yet all of these innocent businesses who have funds tied up in this debacle are expected to suffer until such time as the CSSF believe Cyberservices Europe SA have demonstrated that they are operating within their legislative confines.
I believe that CSSF should allow Cyberservices Europe SA to payout its creditors immediately, surely any investigation can be carried out without putting innocent businesses into financial difficulties or indeed in some cases financial ruin.
If someone confiscated your entire life savings as part of a wider investigation, how would you be feeling??
Since my wife's store also runs payment processing via PayMill, we were facing the same issues as you all and were left equally in the dark since receiving the email notification by PayMill.
I have called them today and have been reassured that payment processing for merchants affected by the CyberServices / Klik&Pay temporary suspension by CSSF will be restored within 1 to 2 business days.
As for the funds currently held by CyberServices / Klik&Pay, that too should be resolved shortly as it is a separate matter.
Hope this helps - going to keep you posted if we find out anything else.
That is contradictory information to what I was told, when I spoke with a staff member at PAYMILL and spoke bluntly about the situation stating that innocent people may lose their businesses and possibly their homes if their money is not released from Cyberservices Europe SA in a timely fashion. One staff member at PAYMILL told me I think we may all be without jobs in a few days. An employee of Klik & Pay also told me by phone we are all uncertain about our own futures that doesn't tie in with what you are saying.
Lets say the employee I spoke with was being dramatic, are you going to trust PAYMILL to process your payments again? bearing in mind PAYMILL is part of Cyberservices Group the one that is currently being investigated by Luxembourg's version of the FCA. (CSSF)
Having spoken to a few people they all said the same that things had been "weird" with PAYMILL for a few weeks, their accounts were blocked for no real reason, each settlement was only being paid out on request and settlement payments were dropping in late which had not happened in the years prior, I would make the assumption that they may have been aware of something about to happen or at least something not right as far as the availability of funds was concerned? this is just an assumption of course and my opinion based on the facts above.
Bearing in mind that the CSSF shut down Cyberservices on the 22nd/23rd July and Paymill told us what was happening on the 29th July 6 days later.
I have seen the letter from the CSSF and it states that no recipients are allowed to use the content of the letter for any other purpose than the purpose for which the letter was sent which is purely to serve as information to the recipients. Which is basically saying please do not tell everyone on the internet what is going on...
As I said in my original post I have it on good authority that there is no estimate on when funds being held up due to these investigations will be released and people should be aware of this and not given any false hope like "should be resolved shortly" no one I have spoken to or any communication I have seen have said anything like this.
As for Klik & Pay being able to offer card processing services once again in 1 to 2 business days, they would almost definitely have to find a new acquiring bank to work with and I believe and again just my personal opinion, that this will take more than 1-2 business particularly as Klik & Pay is also part of Cyberservices Group who are being investigated.
Its been 17 days since our client/partners funds were seized as part of the CSSF's "wider investigation" into Cyberservices Europe SA, they would certainly have gone out of business had they not been able to take a loan to pay their suppliers last week.
@TemptingTraff1c Thanks for the invaluable information. I too am very suspicious of the feedback they gave us and merely repeated what I was told on the phone. We shall wait for further action by PAYMILL but have already initiated approval processes for another gateway and seeing how PAYMILL have handled this incident, my wife's business is almost certainly not going to continue with them either way.
We received a confirmation from CSSF that they accept our contract and screen print as proof that we are indeed creditors of Cyberservices Europe SA. But that is pretty much it. We have no indication of how long our money will be held up due to this. In fact they state that as long as CYBERservices Europe S.A. is not respecting its legal obligations with regards to article 14 of the law of 10 November 2009 on payment services concerning safeguarding requirements of funds, the payment services provided by CYBERservices Europe S.A. remain suspended.
Klik and Pay are saying - Sorry but we don't have more information regarding the suspension of the activity at this moment. We have no information from our executives. We just know that they try to solve the issue as soon as possible...
And that is it.. their money is held indefinitely and basically nothing they or we can do about it which we find shocking to be honest If I took your money or you took my money we would be facing jail, apparently its legal if you are the CSSF. I think that as we have proven we are creditors and that specific amount of money belongs to us they should allow Cyberservices Europe SA to transfer that money out to us and continue their investigation, how hard can that really be to arrange?
I am sorry to hear that you are in the same position and are effected by the situation. You should be clear though that chasing PAYMILL is a waste of time your contract is with Cyberservices Europe SA and it is they who must make changes according to the CSSF in order for the freeze to be lifted on their business, it is Cyberservices Europe SA who have our physical funds.
We have spoken to a Lawyer in Luxembourg who have a line into the CSSF and experience dealing with them which may benefit. Although they have said "we can not guarantee your money back" we feel that by instructing us in the matter we can certainly expedite the situation and also obtain answers.
We have been quoted €1000 for them to take on the case and to pursue Cyberservices Europe SA what they owe us on our behalf. Why don't we all speak via email / phone and collaborate our efforts, I can then speak with the Lawyer in Luxembourg about a reduced fee for taking on both / all three cases? Just a thought...
PM me for email and phone contact if interested in joining forces to save money.