The increased popularity of Internet-based financial services has led to the introduction of many new innovations. Often described as New Payment Methods, they are frequently offered by providers outside the mainstream financial services industry. While offering improved services to a widened customer base, there is the potential for money laundering and terrorist financing usage, concerns recognised by the European Council. To explore potential misuse, this research focused on a range of new payment methods within the European Union. Analysis included their various features, practical usage and customer identity requirements. Two of the most popular and widely available new payment methods—prepaid credit cards and online payment systems—were selected for more in-depth analysis focusing on those available in the Republic of Ireland and the United Kingdom. This involved applying for, and/or purchasing relevant products and services, and assessing the customer identification and profile-building process. Their practicality for money laundering or terrorist finance was reviewed along with the regulations pertinent to their provision. Evidence suggests that, while there are some matters of concern, many online payment providers closely monitor customer applications and use of services. However a number of serious shortcomings were evident in relation to some prepaid card providers in their verification of customer identity and profile details, and the controls in place to prevent multiple card holdings by individual customers.