Payment Institutions

  • Section:

I. Licensed payment institution
II. Registered payment institution
Requirements for the board members, council members and persons with qualifying holding
Fee for document handling
Cancellation of an payment institution registration or licence upon the institution’s own application
Meeting with potential market participants

The payment services specified in Article 1(1) of the Law on Payment Services and Electronic Money (hereinafter – the Law) are entitled to provide a commercial company which has received a licence from the Finance and Capital Market Commission (hereinafter – the Commission) for the operation of a payment institution or a person (natural or legal) which is not required to obtain a licence for launching the operation of a payment institution and is registered in the register of institutions maintained by the Commission.

I. Licensed payment institution

In order to receive a licence for the operation of a payment institution, the commercial company must submit the relevant application to the Commission, accompanied by the documents and information referred to in Article 11 of the Law and in the Commission’s Regulations No 155.

Initial capital requirements

The initial capital of a licensed payment institution must be equivalent to at least the following amount:
1) EUR 20 000 where the payment institution provides only the money remittance services;
2) EUR 50 000 where the payment institution provides only the payment initiation services;
3) EUR 125 000 if the payment institution provides any of the payment services referred to in Article 1 (1), Subparagraphs “a”, “b”, “c”, “d” or “e” of the Law.

Whereas, if a licensed payment institution provides only an account information service, it is not required to have the initial capital. In any event, to provide an account information service and/or a payment initiation service, the payment institution shall be required to have its professional civil liability insurance.

The Commission shall take a decision on the issuance of a licence or refusal to issue a licence and inform the applicant within three months after receipt of all the necessary documents, notifying reasons for the refusal in the event of refusal.

The Commission shall issue the licence to the payment institution for an indefinite period of time.

Regulatory requirements for the operation of payment institutions are available at https://www.fktk.lv/en/law/payment-institutions/

II. Registered payment institution

In exceptional cases, if a person’s intended commercial activity meets the conditions referred to in Article 5 of the Law, the person does not need to obtain a licence issued by the Commission for the operation of the payment institution but only to obtain the status of a registered payment institution.

In order to commence the operation of a registered payment institution, the payment institution shall submit to the Commission a relevant notification accompanied by the documents and information referred to in Article 5 (2) of the Law and in the Commission’s Regulations No 155.

Conditions for the launching of the operation
A registered payment institution does not need the initial capital. At the same time, it must have sufficient resources at its disposal to start the planned business.

A person’s intended commercial activity must meet the following conditions:
(1) the person intends to provide only a money remittance service or issuing of payment instruments, or both;
(2) the estimated arithmetic average of future 12-month payments does not exceed EUR 3 million per month for authorized types of payment services (money remittance or issuing of payment instruments);
(3) payment service users (customers) of the payment institution must be related to the Republic of Latvia (for example, resident of Latvia or a company registered in Latvia);
(4) the payment institution’s board (seat) and legal address must be located in the Republic of Latvia. Its place of business is exclusively within the territory of the Republic of Latvia. It does not intend to offer and provide payment services outside Latvia or through international payment schemes.

A registered payment institution shall take into account that if it intends in addition to provide any of the payment services referred to in Article 1(1), Subparagraphs “a”, “b”, “c”, “d”, “h” or “i” of the Law, it must obtain a licence in accordance with Article 11 of the Law, regardless of the planned turnover.

After receiving all the information and documents specified in the Law and the Commission’s Regulations No 155, the Commission shall assess within the 30 days, whether the person complies with the requirements of the Law.

Regulatory requirements for the operation of payment institutions are available at https://www.fktk.lv/en/law/payment-institutions/

Requirements for the board members, council members and persons with qualifying holding

Persons who will act on the board or the council of the payment institution, or the persons responsible for preventing money laundering and terrorist financing, must have an impeccable reputation, appropriate competence and education. Whereas, persons who have acquired a qualifying holding directly or indirectly in the institution must have an impeccable reputation.

Regulatory requirements for the operation of payment institutions are available at https://www.fktk.lv/en/law/payment-institutions/

Fee for document handling

The fee for handling the documents submitted for obtaining the licence is 5,000 euros.
The fee for handling the documents submitted for the registration of payment institution is 2,500 euros.

If a person plans to offer an innovative service in the field of electronic payments, the fee for handling documents is 450 euros. The person should notify the grounds to the Commission on which it considers that the relevant service should be considered innovative.

Regulatory requirements for the operation of payment institutions are available at https://www.fktk.lv/en/law/payment-institutions/

Cancellation of an payment institution registration or licence upon the institution’s own application

If a payment institution requests the cancellation of its entry in the register or licence of payment institutions in accordance with Article 25.1 (1), Subparagraph 6 of the Law or accordance with Article 25 (1) Subparagraph 8 of the Law, it shall submit an application to the Commission and the following documents shall be attached:
1) the decision of the payment institution to terminate the provision of payment services;
2) the balance and the off-balance of the payment institution on the date of which it terminated the provision of payment services, indicating the positions in which the funds related to the provision of payment services were listed;
3) confirmation that the payment institution has no liabilities to its customers – payment service users;
4) a statement issued by a credit institution, in which the payment institution has an account to hold the money of the payment services users separately from the property of the institution, stating that there is no balance on that institution’s account.

After receiving these documents, the Commission shall examine the application within 30 days and take a decision on the exclusion of the institution from the register of payment institutions. The Commission could also ask for an additional explanation of the decision taken by the payment institution. The Commission will inform the public in writing of the decision taken as well as will inform about the final settlement related to the payment institution’s contributions to the Commission.

Meeting with potential market participants

The Commission’s experts offer consultations to potential market participants to help them better understand regulatory requirements for licensing and registration of e-money and payment institutions, as well as identify potential challenges by developing new and innovative products or business models.

Our experts provide:
· clarifying certain aspects of regulatory requirements;
· advice on regulatory requirements for early stage of an innovative product or business model.

Please apply in advance to make an appointment: fktk@fktk.lv

Contacts


Address:
Kungu iela 1, Riga, LV-1050
Phone:
6 7774800
E-mail:
Previous sign-in to the secretary:
67 774 801
Data protection:

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