Novel to Payment Services Act signed by the Polish President – significant changes on payment services market

On 22nd August 2023 the Polish President signed the Act on change of laws in connection with providing for development of the financial market as well as protection of investors on this market (hereinafter referred to as Novel). The Novel has a short 30 days long vacation legis and introduces significant changes to the payment services market, including in particular the operations of Polish small payment institution.

 Key changes of general nature

 The Novel introduces the following significant changes to the Polish Payment Services Act:

1. new definitions of payment instrument as well as the activity of issuing payment instruments,
2. changes in the authorized payment institution (API or KIP) license process – the Novel lifts the obligation to obtain assessment of the National Bank of Poland – which is currently applicable to those API applications which cover the service of acquiring
3. the providers of account information services (AISP) will now be obliged to secure the users’ claims in the form of insurance, bank guarantee or insurance guarantee

Key changes for small payment institutions (SPI or MIP)

The scope of documents forming the small payment institution license application will be extended with the following new elements:

• description of organizational solutions enabling calculation of the total monthly value of payment transactions (for the purposes of the transactional limit of 1.5m EUR average monthly)
• AML policy
• business plan
• financial plan
• risk management system
• client money policy
• description of auxiliary activities (e.g. currency exchange)

In practice, this may result in complicating and extending the duration of SPI license (MIP license) proceedings. However, the final assessment of the changes should wait for the Polish regulator Financial Supervision Authority (KNF) to develop methods for examining applications in the new mode. Importantly, the new provisions will also apply to license proceedings initiated under the “old” act, but not yet finalized as of the date of entry into force of the Novel.

What’s also about to change with the Novel is the impact of SPIs submitting an API license application on the payment transaction value limitation (monthly average EUR 1.5 million). In the current legal status, the fact of submitting an API license application entirely excludes the application of this limit for the applicant SPI until the final settling of the license proceedings (e.g. by issuing API license). Pursuant to the new regulations, starting from 1 January 2024 (extended vacatio legis), the SPI that applied for an API license will be subject to an increased transaction value limit, however, in the amount not exceeding the value reported to the Polish regulator Financial Supervision Authority (KNF) before submitting the API license application. In other words, the new transaction value limit will be individual for each SPI applying for API license.

The last significant change for SPIs is the introduction of a ban on submitting applications for extending the scope of the SPI license in the period where a given SPI exceeds the transaction value limit (EUR 1.5 million on average per month). This new ban will also come into force from January 1, 2024 (extended vacatio legis).

When will the new regulation come into force?

Apart from the two cases of extended vacatio legis mentioned above, the amendments to the Payment Services Act will come into force within 30 days from the date of publication of the Novel in court gazette, which took place on 29 August 2023 (Journal of Laws 2023 item. 1723).