Payment provider Zimpler has problems with Swedish regulator

A few months ago, the Swedish regulatory authority (Spelinspektionen) criticised the fact that the payment service provider Zimpler, also from Sweden, was repeatedly cooperating with offshore casinos. It was even threatened with a fine in the millions. The sanctions are off the table, but the case is not yet closed. Here is the full story.

The payment provider Zimpler should at least be familiar to many experienced German gamblers. Before the gambling agreement of 2021, it could be found in a number of online casinos and sports betting providers aimed at customers in Germany. We currently do not have a platform with a German licence in our comparison that provides Zimpler - this applies to both casinos and betting providers.

Founded in 2012, Zimpler has become a very popular solution for paying for all kinds of online purchases and digital gambling, especially in Scandinavia. The core idea is to make online transactions quick, easy and secure. Users can use Zimpler to move money via their mobile phone by linking their bank account or credit card to the service. The process is user-friendly and requires little more than entering a phone number and a verification code, making the solution particularly attractive to users who value convenient payment methods.

In practice, Zimpler works as follows: After registering with an online retailer or service provider that accepts the payment method, the user selects Zimpler as a payment option. They then enter their mobile phone number and receive a verification code by text message. This code can be used to confirm the payment. The transaction is then debited either directly from the linked credit card or bank account.

Despite its popularity and the fact that its services are absolutely legal and under the supervision of the Swedish Financial Supervisory Authority (Finansinspektionen) (or in some ways precisely because of this), Zimpler has come under massive legal pressure in recent months. The reason for this are repeated accusations by the Swedish Gambling Authority that the payment service provider works with offshore gambling companies that often operate outside the regulated markets. This is said to support such business, which is not permitted. A fine of more than two million euros was threatened.

Spelinspektionen instructs Zimpler to end offshore business

As Zimpler itself published in a press release, the company was ordered by the Swedish Gambling Supervisory Authority on 6 July 2023 to stop providing payment services with BankID for games of chance accepted by Swedish consumers without a Swedish gambling licence. The order should be implemented by 31 July at the latest.

Zimpler said: "Zimpler will comply with the order, as it already announced in May that it would terminate the business relationships affected by the order. However, the company has decided to appeal against the order as it raises legal issues that need to be clarified not only for Zimpler, but for the industry as a whole."

Spelinspektionen has threatened Zimpler with a fine of SEK 25.0 million (equivalent to EUR 2.1 million) if the deadline is not met.

The authority emphasised that it is not permitted to promote participation in games that are offered without the required licence as part of a professional activity or for other commercial purposes. However, this is exactly what Zimpler would be doing by providing its services to offshore providers. This was particularly critical in connection with payments via BankID, as the option was specifically and exclusively aimed at players from Sweden.

For Spelinspektionen, it was clear that Zimpler works closely with operators that do not have a licence but are targeting the Swedish market. These companies would use Zimpler's payment solutions in Sweden - and Zimpler was thus promoting unlicensed activities.

Administrative court confirms Zimpler's opinion

It was not until mid-May this year that it was announced that Zimpler had apparently been successful with its appeal. The Administrative Court found that the authority lacked the basis for the order and subsequently cancelled it.

However, Spelinspektionen immediately lodged an appeal against this judgement. The regulatory authority is of the opinion that Zimpler, as a Swedish company, has specifically focussed its payment service on Sweden in connection with the illegal gambling offers and is therefore promoting illegal gambling. The use of BankID, which is only available in Sweden, is a clear indication of this.

As part of the application, the authority is requesting a review by a higher court. There is no precedent. According to the gambling authorities, the administrative court "incorrectly assessed the legal situation".

Conclusion

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