A payment institution is a commercial company that provides payment services referred to in Paragraph one of Article 1 of the Law on Payment Services and Electronic Money and that has received a licence for the operation of a payment institution issued by the Financial and Capital Market Commission or a person (natural or legal) that does not need to receive a licence to commence the operation of a payment institution and that has notified the Financial and Capital Market Commission of the intended commencement of the activity.
A payment institution to which a licence for the operation of a payment institution is granted or which has notified the Financial and Capital Market Commission of the commencement of its activities (not required to receive a licence) is registered with the register of licensed institutions under the following conditions.
A payment institution does not need a licence issued by the Financial and Capital Market Commission provided that it complies with the following conditions:
1) the mean value of the payments made during the previous 12 months by the payment institution or its agent for whose activity the payment institution assumes full responsibility or the mean value of the payments intended to be effected within the next 12 months as set out in the commercial activity plan does not exceed three million euro per month;
2) the restrictions set out in Paragraph 1 of Article 21 of the Law on Payment Services and Electronic Money do not apply to any of the persons referred to in Subparagraph 10 of Paragraph 1 of Article 11 of this Law. To commence its activity, a payment institution submits to the Financial and Capital Market Commission a relevant notification (filled-in Annex 3 to the Financial and Capital Market Commission's Regulations No 64 of 15.04.2011; Regulations on Granting Payment Institution and Electronic Money Institution Operating Licences, Registration of Payment Institution and Electronic Money Institution, Documentation and Reporting) and documentation and information referred to in the Law on Payment Services and Electronic Money.
In case a payment institution fails to comply with above criteria it is required to receive a licence for the operation of a payment institution, by submitting to the Financial and Capital Market Commission an application (filled-in Annex 1 to the Financial and Capital Market Commission's Regulations No 64 of 15.04.2011; Regulations on Granting Payment Institution and Electronic Money Institution Operating Licences, Registration of Payment Institution and Electronic Money Institution, Documentation and Reporting), appending documentation and information referred to in the Law on Payment Services and Electronic Money and regulatory requirements of the Financial and Capital Market Commission.
A payment institution shall ensure that on the day when the decision to grant a licence for the operation of a payment institution is taken its initial capital is at least:
1) 20 000 euro where a payment institution provides only money remittance services;
2) 50 000 euro where a payment institution provides the payment services referred to in Subparagraph g) of Paragraph 1 of Article 1 of the Law on Payment Services and Electronic Money;
3) 125 000 euro where a payment institution provides any of the payment services referred in Subparagraphs a), b), c), d) or e) of Paragraph 1 of Article 1 of the Law on Payment Services and Electronic Money.
The Financial and Capital Market Commission takes a decision on granting or refusing to grant a licence and notifies the applicant within three months after receiving of all necessary documents; where it refuses to grant the licence, it also specifies the reason for refusal. The Financial and Capital Market Commission grants the licence for the operation of a payment institution for an indefinite time.
The Law on Payment Services and Electronic Money and other relevant regulatory rules for payment institutions are available on the Commission’s website at: http://www.fktk.lv/en/law/payment_institutions/laws/2010-04-16_payment_services_law_av/