Payment service providers
The Payment Services Act provides a fixed list of types of suppliers of payment services and specifies the range of permissible activity by particular categories of payment service providers.
One of the fundamental principles introduced by the Payment Services Act in Poland is to establish a fixed list of types of entities authorised to perform payment services—defined in the act as “payment service providers”.
All categories of payment service providers—there are a total of 10 under the Polish act—are listed in Art. 4(2) of the act. The variety among payment service providers will be particularly important for banks, which traditionally have dominated the payment services market. New competitors will appear after entry into force of the Payment Services Act. Because specific categories of payment service providers differ with respect to their permissible scope of activity and the nature of the payment services they provide, it is important to review these differences in order to assess the extent to which particular providers will be competing directly with one another.
This article is too brief to give an exhaustive description of all of the differences among payment service providers, so we have decided to focus on the key differences from a business perspective.
Banks will continue to enjoy the broadest authority to provide payment services. First, they will be entitled to perform all payment services defined in Payment Services Act Art. 3. Second, they will be able to offer payment services to their customers linked with traditional interest-bearing bank accounts. Third, they will be able to offer payment services with a credit function (as now, bank customers will be able to make payments using funds borrowed from the bank—for example using an account tied to a line of credit or using a credit card). Fourth, banks will be authorised to provide payment services based on electronic money without being required to obtain an additional licence. (The legal framework for payment services based on the use of electronic money is for the most part provided for in the Electronic Payment Instruments Act, which will need to be amended in order to transpose the new Electronic Money Directive (2009/110/EC) into Polish law.)
The greatest competition for banks may come from “payment institutions”—a new category of licensed entities. Like banks, they will also be authorised to provide all types of payment services. But they differ from banks in three fundamental ways. First, payment institutions may maintain payment accounts for their customers for use in performing payment services (e.g. carrying out transfer orders), but the funds in the account may not bear interest (Payment Services Act Art. 7(3)). Second, while payment institutions may make loans in connection with payment services, the act provides for certain restrictions in this respect (e.g. a maximum 12-month loan period under Art. 74(3)). Third, if payment institutions wish to provide payment services based on electronic money, they must obtain the status of an “electronic money institution”, which requires an additional licence.
“Payment offices” will probably be the most numerous group of payment service providers. However, the scope of activity of payment offices will be limited to carrying out money remittance, which is a transfer of cash that does not go through a payment account of the payer—for example, a bill-paying service. Payment offices will not be authorised to open payment accounts or lend money for transfers.
Krzysztof Wojdyło, Banking & Finance practice, Wardyński & Partners