Payment Institution in Poland – Payment Institution License

As in all UE countries – Payment institutions in Poland may conduct their commercial activity only on the basis of a license granted by Polish Financial Supervision Commision (KNF).

Payment Institution License in Poland

The Payment Instutution License may cover one or more of the following activity types:

1. accepting cash payments, performing cash withdrawals from a payment account as well as all activities necessary to provide/maintain payment accounts
2. performing payment transactions via:
   1. payment orders (initiated by recipients)
   2. transfer orders (initiated by payers)
   3. payment cards (debit, credit, prepaid) as well as other payment instruments
3. performing payment transactions using its own funds (granting payment credit)
4. issuing payment instruments (including credit cards)
5. acquiring
6. performing money orders
7. performing payment transactions initiated using means of telecom / digital / IT nature and transferred to providers of these telecom / digital / IT services, acting as intermediaries between payers and ultimate receivers / beneficiaries

As a consequence, payment institutions in Poland:

1. are subject to supervision by FSC
2. need to meet precise criteria (and maintain them) concerning i.a.:
   1. share capital
   2. own funds
   3. transparency
   4. properties of managing persons as well as main shareholders (holding ≥10% shares in a payment institution)
   5. terms of risk management and internal audit

Obtaining the license for Payment Institution in Poland

1. As mentioned above the license is granted by FSC. The permit indicates activity types covered / allowed to its holder. If a payment institution intends to change the activity types, it should apply for permit amendment.

2. The proceedings conducted by FSC shall be closed within three months from lodging a full motion. The only exception is the situation of applying for permit covering the activity ad. A.2.e. above (acquiring) where FSC needs to obtain NBP’s opinion before granting the permit (the opinion is not binding for FSC). Period of obtaining NBP’s opinion shall not be included in the three-month period reserved for proceedings conducted by FSC.

3. The payment institution motion shall contain, among others:

1. list of activity types to be conducted
2. business plan for at least three years ahead. Such business plan shall contain:
   1. assumptions for the strategy including targets and development directions
   2. marketing plan (characteristics of prospected services / targeted group of clients, analysis of competition, strategy concerning pricing, distribution methods)
   3. operations plan (investment sources, financing sources, meeting the criteria concerning audit of payment institutions, outsourcing policy, technology / IT used, information flow)
   4. organisation and management plan (structure, capacity of corporate bodies, capital group relations, employment policy, internal by-laws, internal control etc.)
   5. schedule / timetable indicating planned deadlines for reaching subsequent stages of activity as well as for reaching strategic targets
   6. information whether the applicant intends to conduct also other activity (not governed by PS)
3. financial plan (revenue, costs, profit, loss, investments, capital needs, financing sources, cash flow, balance, financial assessment etc.)
4. documents confirming possession of funds allocated as ‘own funds’ (this term is explained below). The documents shall indicate specific amounts as well as confirm that the funds:
   1. do not originate in a loan / credit
   2. are not encumbered in any way
   3. do not originate in illegal or undisclosed sources
5. terms of risk management system and of internal audit / control consisting of:
   1. organizational solutions (structure, decision making process, methods of fulfilment of the obligations resulting from anti-money laundering / PML regulations)
   2. terms of risk management (risk assessment methods, concerning i.a. risk of losing financial liquidity in the event of granting payment credit or conducting activity not governed by PS provisions)
   3. terms of internal control / audit (concerning performance of payment transactions, including agents as well as other representatives) including means of examination of fulfilment of obligations under:
      • PS regulations
      • anti-money laundering regulations, anti-terrorism regulations (PML)
      • internal by-laws
4. rules of conduct concerning accepting payments from customers
5. rules of conduct concerning recognition of complaints lodged by customers
6. rules of internal communications
6. personal data enabling identification of:
   1. managing persons
   2. persons holding (even indirectly) at least 10% of shares in the applying company (hereinafter: main shareholders)
7. data / documents enabling to assess whether: (i) applying company, (ii) managing persons and (iii) main shareholders guarantee stable and cautious management of a payment institution, in particular data concerning, among others:
   1. necessary education
   2. necessary professional experience (including CV as well as cases of losing a job in a workplace form financial sector)
   3. any criminal records
   4. pending criminal proceedings
   5. significant financial commitments
   6. personal / corporate affiliations
   7. bans on conducting commercial activity / performing certain professions or functions
   8. fulfilment of tax obligations
   9. conducting commercial activity

4. Any changes concerning above information shall be immediately notified to FSC.
5. Other criteria taken into consideration by FSC when recognizing the permit motion:
6. share capital amounting to at least 125,000 EUR (equivalent in PLN using NBP average exchange rate as for the date of granting permit). These funds cannot originate in loans / credit / undisclosed sources or be in any way encumbered
7. possession of own funds in a required amount (please see the calculation below)
6. By own funds one should understand the sum of:
   • share capital
   • revaluation reserve of tangible fixed assets
   • undistributed profit
   • decreased by:
   • own shares or stocks
   • any obligations under privileged stocks
   • intangible assets
   • loss
   • please note that the own funds shall be covered with money in at least 80%.
7. Own funds shall amount to either (whichever value is higher):
   • 125.000 EUR or
   • the amount indicated using a formula introduced by PS regulation
8. If a payment institution ceases to meet any of the obligatory abovementioned criteria (including maintaining minimum level of own funds, minimum share capital, guarantee of stable and cautious management of a payment institution etc.), FSC shall be authorised to withdraw the permit (art. 69 PS).

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