Test for application of the Payment Services Act
In light of the consequences that follow from a duty to comply with Poland’s new Payment Services Act, it is important for companies to review carefully whether the act will apply to the services they perform.
Perhaps surprisingly, if a business regards its own services as payment services, that is not in itself enough to bring the services automatically under the Payment Services Act. There are a large number of exceptions in the act which may give businesses a chance to avoid the necessity to adjust their operations to comply with the act.
To determine whether services are subject to the Payment Services Act, we suggest conducting the following test, which is broken down into stages.
First the nature of the services provided by the business should be precisely determined, and then check whether they may be classified as one of the payment services indicated in Art. 3(1) of the Payment Services Act. If a service is not one of the services referred to there, it may be concluded that the act will not apply. If it is, then continue the test.
The next step is to determine whether the given service, despite being classified as a payment service under Art. 3(1), is subject to one of the limitations set forth in the act. The act essentially provides for three limitations on application of the act:
a) Territorial limitations
Payment Services Act Art. 5(1) and (2) introduce a general rule known as the “two-leg approach”. This means that the act will apply to payment transactions involving providers of payment services conducting operations in the territory of member states of the European Union or the European Economic Area. It should be stressed that the very important Art. 59, which defines the rules for determining the “value date” (e.g. the date when funds are available to the recipient), will also apply to transactions that do not meet the requirements of the two-leg approach.
b) Currency limitations
Under Payment Services Act Art. 5(3), the regulations of chapters I – III (e.g. information requirements and rules for performance of payment services) and chapter IX (rules for civil and criminal liability connected with performance of payment services) apply only to payment services in euro, Polish zloty, or the currency of another member state. We should mention the special situation of the Swiss franc, which is the official currency of Switzerland as well as Liechtenstein. As a member of the EEA, Liechtenstein is a “member state” for purposes of the act, and therefore payment transactions in Swiss francs are transactions in a “currency of another member state” pursuant to Art. 5(3) of the act.
c) Limitations involving the nature of the services
Art. 6 of the act provides extremely important limitations. It contains a long list of services which are not subject to the act even though they meet the definition of payment services. It is clear that entities operating on the payment market will frequently try to use this article in order to avoid applying the burdensome provisions of the act. At the same time, it should be expected that some of the exceptions provided in this article will generate grey areas of interpretation. This will probably be the case, for example, with the extremely important exception in point 11, involving a limited network of service providers accepting a payment instrument. In essence, a payment instrument (such as a payment card) that is accepted only within a specific retail chain will be excluded from the application of the Payment Services Act. However, a minor change in the functionality of such an instrument (e.g. tying it to a virtual account that also allows payments to be made between participants in the system organised by the retail chain, or enabling it to be accepted by other chains) may change the treatment of the instrument and bring it within the coverage of the act. Thus it is crucial to analyse the nature of the specific service carefully, and likewise with any changes in the service.
Assuming that a service has passed both of the first two steps, the final step in the test is to determine whether the service will be subject to all of the provisions of the Payment Services Act. The act provides for at least three situations limiting the application of the act with respect to a specific service:
a) Services provided to non-consumers
Under Art. 16 and 33 of the Payment Services Act, if the user of a payment service is not a consumer, the parties may agree to limit the application of the act with respect to the service.
b) Low-value payments
Under Art. 19 and 39, application of certain provisions of the act is excluded with respect to payment instruments for which the value of transactions using the instruments is limited to certain maximum amounts.
c) Time of performance of payment transactions
Under Art. 53, the “D+1” rule (the requirement to transfer the amount of the payment transaction to the recipient’s bank at the latest by the end of the next business day following receipt of the payment order) applies only to the limited instances set forth in Art. 53.
Krzysztof Wojdyło, Regulatory practice, Wardyński & Partners