Govt cracks down on illegal payment gateways facilitating money laundering

New Delhi, Oct 28: In a move against cyber-financial crime, the Ministry of Home Affairs (MHA) has announced a major crackdown on illegal digital payment gateways set up by transnational organised cybercriminals. These payment gateways, operating through a network of “mule” bank accounts, are reportedly being used to facilitate money laundering services on a wide scale. The announcement followed a series of nationwide raids conducted by Gujarat and Andhra Pradesh police forces, leading to significant discoveries.

The Indian Cybercrime Coordination Center (I4C), under the MHA, has been investigating and monitoring these cybercriminal networks. In their recent findings, I4C revealed that these criminals are creating illegal digital payment infrastructures using rented or mule accounts, which are often obtained via social media platforms such as Telegram and Facebook.

These mule accounts, sometimes registered under the names of shell companies or unsuspecting individuals, allow criminals to mask illicit transactions, evading detection and regulation. “This practice of using rented accounts to build a payment network is a clear strategy by organised cyber-syndicates,” said an official from I4C.

According to FIRs filed in Gujarat (FIR 0113/2024) and Andhra Pradesh (FIR 310/2024), authorities found that criminals are using these gateways to channel funds from a variety of online scams. The illegal platforms include fake investment schemes, offshore gambling websites, and counterfeit stock trading sites, each taking advantage of the anonymity provided by these mule accounts. Funds are quickly transferred, often through layered transactions to other accounts, as soon as they arrive, misusing bulk payout features offered by some banks.

Several rogue payment gateways, including PeacePay, RTX Pay, PoccoPay, and RPPay, were flagged in the investigation. These gateways, reportedly operated by foreign nationals, have been providing “Money Laundering as a Service,” facilitating the laundering of criminal proceeds across borders.

Under the guidance of Union Home Minister Amit Shah, the MHA has vowed to take decisive steps toward securing India’s digital space. “We are dedicated to building a Cyber Secure Bharat,” the MHA stated, emphasising its commitment to collaborating with law enforcement agencies across the country. Prime Minister Narendra Modi’s administration has prioritised cybersecurity, bolstering the country’s resilience against these increasingly sophisticated cybercrime networks.

I4C’s advisory also issued a stark warning to citizens, urging them to refrain from selling or renting their bank accounts, company registration certificates, or Udhyam Aadhaar registration certificates. Engaging in such practices, the advisory noted, could result in severe legal consequences, including arrest. Banks have been encouraged to deploy stricter checks to prevent misuse of accounts, and citizens have been reminded to report any suspicious activity by contacting the national cyber crime helpline (1930) or visiting www.cybercrime.gov.in. Citizens are also advised to follow the MHA’s “CyberDost” social media channels for regular cybersecurity tips.