Payment Providers

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Payment Service providers

The EU directive on payment services was replaced and updated in 2018. The Central Bank is the competent authority for the authorisation and supervision of payment institutions.

Payment services are defined broadly to include a range of services in relation to

  • payment,
  • payment operations,
  • remittances,
  • initiation services,
  • account information services,
  • execution of payments and credit.

There is a register of payment institutions authorised under the regulations. Other payment service providers may also provide payment services including

  • credit institution
  • an Post
  • electronic money institution (separately regulated
  • small payment institution

Some limited categories of firm are also excluded from some of the obligations.

Guidance published by the Central Bank includes guidance in relation to

  • authorisation as a payment institution
  • authorisation as an electronic money institution
  • supervision processes for payment institutions
  • supervision processes for electronic money institutions
  • amendments and variations to authorisations

Regulation

Payment providers are subject to detailed consumer protection requirements including

  • the consumer protection code
  • the electronic money regulations
  • the payment services regulations

They may also be subject to the consumer credit agreements regulations.

Payment providers may be subject to other general Central Bank codes relevant consumer compliance

The European Banking Authority has published guidance on oversight and governance arrangements for retail banking products. The guidelines include requirements which may apply to payment providers.

Payment providers are subject to detailed anti-money laundering and anti-terrorism requirements.

There are professional indemnity insurance requirements.

Authorisation

The authorisation process for regulation as a payment institution is broadly similar to other applications for entities of similar scale and significance. The application should be the subject of prior consultation.

The application requires completion of the

  • form of application anti-money laundering et cetera
  • preauthorisation risk evaluation
  • applications or corporations directors and natural persons

as circumstances require.

The relevant personnel must comply with fitness and probity requirements. Key functions require the prior consent of the Central Bank to the appointment.

There is a range of guidance and sector specific requirements applicable to persons seeking approval for preapproval control function roles in payment institutions and electronic money institution.

The application process involves a number of stages. The assessment phase generally takes 90 working days although this may be postponed when further information is required. When the assessment is favourable, a proposal may be approved subject to conditions and further information. In the event of a proposed refusal, there is an opportunity to make submissions in response to the proposal for refusal. They are considered before the final decision is made.

Regulation

Payment institutions are subject to Central Bank’s general probability risk and impact system (PRISM) for the supervision of regulated firms. Firms must have the procedures and policies of the requisite system to mitigate risk and monitor compliance. Supervision includes

  • analysis of returns
  • conduct inspections
  • the holding of review meetings
  • regular correspondence and engagement
  • risk rating of firms

The Central Bank expects firms to have a positive consumer focused culture and consumer protection framework is fit for purpose and ensures that customers best interests are protected.

The fitness and probity requirements apply to key positions. Control functions require either approval or preapproval depending on the function concerned

Central Bank consent is required to acquisitions of interests and holdings in payment institutions similar to those in respect of other regulated entities. Financial accounts are required to be submitted. There are more regular reporting requirements in relation to financial information safeguarding of funds and other matters. Guidance is published and supplementary return and accounts return.

There are ongoing obligations to report breaches. Auditors have obligations to furnish the general audit statement to the board to the Central Bank. There are additional continuing obligations to make disclosures.

There are statutory duties to make certain reports and confirmations on an ongoing basis. There is an obligation to make a statutory confirmation that there are no issues required to be reported on an ongoing basis.