The Polish Ministry of Finance has produced a proposal for an amendment to the Act on Payment Services, which has been submitted for public consultations. A significant part of the proposal relates to the activities of small payment institutions (SPI) with regard to AML compliance and notification obligations towards the Polish Financial Supervision Authority.
Under the current Act on Payment Services in Poland, payment services may be provided in the form of an SPI, due to an exemption that member states can apply in their national laws under article 32 of Directive (EU) 2015/2366 of the European Parliament and of the Council (PSD2). Under article 32, member states may introduce, in their national legal systems, an additional type of payment service provider that is less stringently regulated, while certain restrictions will continue to apply to business operations of that kind, for instance:
- the payment services provided by the SPI do not include payment initiation services (PIS) and account information services (AIS);
- the monthly average value of transactions executed in the preceding 12 months may not exceed EUR 1.5m (under PSD2 this limit can be set at EUR 3m);
- small payment institutions may only operate within Poland.
An SPI has become a popular form of activity among firms in the FinTech sector that launch payment services. To date, more than 90 firms of this kind have been registered with the Polish Financial Supervision Authority. When the thresholds described above are exceeded, an SPI may apply for a license to provide services as a payment institution. An SPI may continue to operate until the application is reviewed, and is not required to observe the thresholds described above.
Under the legislative proposal of 11 January, 2021, SPIs will be subject to the requirement to submit to the Polish Financial Supervision Authority, when applying to be registered as a SPI, information regarding the AML compliance procedures and information concerning any other activity (hybrid small payment institution). The amendments described above are aligned with a certain shift in the approach taken by the Polish Financial Supervision Authority to entities of this kind, and with a policy of more extensive financial regulation of these entities, even during the registration proceedings.
The changes envisaged in the proposal also include further limits on transactions effected by payment service offices (firms only authorized to provide money transfer services), while for these entities, the requirements and regulatory obligations will be eased.
As part of the public consultations on the draft amendments to the Act on Payment Services, several comments and further proposals for amendments were made from both payment service providers representatives and supervisory authorities, including:
- limitation of the applicability of the so-called “commercial agent exemption”, introduced under Article 3(b) of PSD2, only to contracts of a business nature. Indeed, the Polish Financial Supervision Authority notes that there are currently cases where this exemption is invoked by entities acting as intermediaries in accepting donations;
- imposing additional information obligations towards the National Bank of Poland on payment initiation service providers (PISPs), account information service providers (AISPs) and acquirers conducting cross-border activities in Poland;
- clarification of provisions on payment transactions carried out by telecom operators (direct carrier billing), aimed at eliminating previous doubts related to the permissible scope of application of the exemption;
- adding cases in which a payment service provider may disclose data covered by professional secrecy to supervisory authorities (professional secrecy provisions are specific to the Polish legal order and do not derive directly from PSD2 regulations);
- removal of the requirement to obtain an opinion from the President of the National Bank of Poland in proceedings for obtaining a permit to provide acquiring services as a payment institution, which should significantly accelerate such proceedings;
- the introduction of a requirement for payment institutions to hold statutory collateral for the claims of the account information service users (currently this obligation only applies to the account information service providers (AISPs));
- simplifying the procedures for changing the scope of authorisation as a payment institution;
- restricting the application of the limit on funds held by small payment institutions on the accounts held for its users (EUR 2,000) to consumers only;
- provide the Polish Financial Supervision Authority with control powers over EU electronic money institution branches and their agents operating in Poland;
- extending the list of circumstances in which small payment institutions may be removed from the register of payment service providers, including failure to commence operations within 12 months of being entered in the register;
- the need for transitional provisions, in terms of the entry into force of certain proposed amendments to the Payment Services Act, relating to ongoing registration or authorisation proceedings.
The Ministry of Finance considered some of the above proposals to be reasonable and necessary, and so it is expected that the next version of the bill will contain further changes, significant for the payment services market in Poland. According to the information received from the Ministry of Finance, the decision to hold another consultation conference has not yet been taken. The final decision in this regard will be made after the draft version of the project is developed, considering the amendment proposals from the last public consultations. Work on these amendments is expected to take about two weeks.
By Jan Byrski and Karol Juraszczyk