The National Bank of Ukraine (NBU) begins fundamental revision of the legal framework of the Ukrainian payments and fund transfer market.
In the following few months, the NBU intends to hold a round of meetings for the market participants and stakeholders to introduce the concept of the future regulation of the payment market. The outcome of these meetings with all stakeholders will be joint analysis of proposals on the provisions of the future legal framework.
The regulator intends to bring the national payment legal framework in line with the European one for the purpose of the EU–Ukraine Association Agreement. Specifically, this concerns the initiation of implementation of PSD2 standards (EU Directive regarding Open Banking) into the national law to improve competition in the financial market and innovation in the payment market.
Legal experts and technical support of foreign donors will be outsourced.
In particular, the NBU intends:
- to introduce a range of new payment services (both financial and nonfinancial). Instead of one existing service of fund transfers, there will be eight new services including six financial (depositing funds to a payment account, withdrawal/writing down funds from a payment account, fund transfers from a payment account, fund transfers from a payment account at the expense of a loan, card issue/acquiring, fund transfers) and two nonfinancial services (payment initiation service and provision of consolidation information on a payment account)
- to transform parties to fund transfers and change the roles of payment systems, including canceling the requirement to set up or be a member of a payment system in order to provide payment services (fund transfers). Save for payment services providers, new information services providers may appear on the market, such as payment initiation service provider (PISP) and account information service providers (AISP)
- to classify payment services providers, so that banks, payment institutions, e-money institutions, postal services operators, public sector institutions etc. can provide payment services Also, providers of limited payment services will appear, such as telecommunication and internet operators, social media etc.
- to introduce Open Banking (a safe online access to funds and data on customer accounts for individual service providers that initiate payments and provide consolidated information on accounts)
- to establish new licensing, registration, and supervision rules for nonbank institutions providing payment services. Thus, the requirement to acquire the status of a financial institution before applying to the NBU for a license will be canceled: the status of a financial institution will be granted along with the license. The license for providing payment services will be issued in the electronic form, the same means will be used for filing reporting and cooperation between the market participants. Registration will be effected by recording respective information in the Uniform Register of Payment Services Providers
- to draft new regulation on electronic money, e-money institutions and circulation, as well as on granting nonbank financial institutions the privilege to issue and acquire payment cards, issue e-money, and open payment accounts (for settlements and payments)
- to introduce payment accounts along with the procedure for safeguarding funds of payment services consumers, as well as advancing requirements to security of payment services, such as enhanced requirements for customer authorization and safe remote interaction
- to advance customer rights protection in payment services by introducing clear requirements to providers, introducing limits on liability for unauthorized transactions etc.
- to determine the NBU’s role as the regulator of payment services market authorized to control payment services provision, to handle customer requests, as well as the right to regulate the interchange fee charged on payment transactions, etc.
According to Sergii Kholod, NBU Deputy Governor, these steps will foster modernization of the public regulation of the payment sector and encourage development of innovative business solutions in the payment services market.
“This will create uniform transparent rules for banks and nonbank institutions, drive competition for the customer and consequently for the quality of payment services, as well as introduce a new level of security for the users,” noted the Deputy Governor.