Fintech in Poland

FinTech in Poland – overview

FinTech refers to two basic terms:

  • financial technology meaning all innovations, technologies and easements in the financial sector,
  • entities / companies / startups / individuals who develop the innovative technologies in the financial sector.

Both above aspects of FinTech are fast developing in Poland. FinTech solutions have become very popular in Poland, which seems to be one of the leaders in its region. Payment solutions (like ApplePay or Google Pay or our domestic Polish solution named BLIK), wallet solutions, e-commerce or acquiring solutions, lendtech solutions, deferred payment solutions as well as e-banking apps are used by millions each day. What’s more, FinTechs are quite often focusing on other related markets, including cryptocurrency, insurance, cloud computing, Big Data and artificial intelligence.

FinTech regulatory framework

FinTech companies as a rule are regulated, usually as: domestic payment institutions, small payment institutions, electronic money institutions, banks, investment firms, virtual currency entities. The type of license depends on specific business model or product of a given entity. The regulatory framework includes the following normative acts:

PSD2 Directive

PSD2 Directive (Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC) is the main act regulating the activity of payment institutions. The Directive is implemented into the Polish legal system through the Payment Services Act of 19th August 2011, which contains several derogations from PSD2 Directive. The Polish Payment Services Act regulates the following fields:

  • payment services, including:
    • payment account maintenance
    • execution of payment transactions (direct debit,
    • payment instrument / card transactions, wire transfers and standing orders)
    • execution of payment transactions through payment credit
    • issuance of payment instruments (including payment cards)
    • acquiring of payment instruments
    • money remittance
    • payment initiations services (PIS)
    • account information services (AIS)
  • framework agreements for provision of payment services
  • strong customer authentication
  • domestic payment institution license (KIP license)
  • small payment institution license (MIP license)
  • TPP license (third party providers: AISP license, PISP license)
  • electronic money institution license (EMI license)
  • passporting of payment services into Poland
  • passporting of payment services outside Poland
  • supervision by KNF

EMD2 Directive

EMD2 Directive (Directive 2009/110/EC of the European Parliament and of the Council of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutions amending Directives 2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC) is the main act regulating the activity of payment institutions. The Directive is implemented into the Polish legal system through the Payment Services Act of 19th August 2011.

Banking Law in Poland

Polish Banking Law of 29th August 1997 is an act which sets out the principles of conducting banking activity, establishment and organization of banks (including obtaining bank license in Poland), as well as branches and agencies of foreign banks and credit institutions. Other fields covered by Polish Banking Law are: (i) the principles of reorganization proceedings, liquidation and bankruptcy of banks; (ii) certain rules for conducting activity by financial holding companies and mixed-activity financial holding companies as well as organization of those companies and (iii) the principles of exercising banking supervision, including consolidated supervision by the Polish regulator KNF.

MiFID2 Directive

MiFID2 Directive (Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU) is the main EU act regulating activity of investment firms, as well as other aspect of trading with financial instruments. The Directive is implemented into the Polish legal system through the Financial Instruments Trading Act of 29th July 2005, which contains several derogations from MiFID2 Directive. The Financial Instruments Trading Act regulates the following fields:

  • types of financial instruments compliant with Polish law
  • entities allowed to trade with financial instrument
  • investment firm license
  • securities brokers and investment advisers
  • protecting investors | compensation scheme
  • passporting of services into Poland
  • passporting of services outside Poland

AML Directives

AML 4 Directive (Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC) and AML 5 Directive (Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU) set out the rules to be applied by gatekeepers [obliged institutions, including but not limited to: banks, payment institutions, electronic money institutions and virtual currency (cryptocurrency) companies] towards their customers. The AML Directives are implemented into the Polish legal system through the Act of 1st March 2018 on Combating Money Laundering and the Financing of Terrorism, which contains several derogations from AML 5 Directive. The Act on Combating Money Laundering and the Financing of Terrorism regulates the following fields:
list of gatekeepers / obliged institutions, which contains i.a. banks, domestic payment institutions, domestic electronic money institutions, branches of EU payment institutions, branches of EU and foreign electronic money institutions, small payment institutions, payment service bureaux and settlement agents, investment firms, virtual currency companies, including cryptocurrency companies)
rights and obligation of the Polish AML authority (GIIF)
contents of AML policy to be adopted by each gatekeeper
financial security measures (KYC, simplified due diligence or SDD, enhanced due diligence or EDD, ID verification measures, on-going screening, transaction monitoring etc.)
SAR filings as well as other AML related reporting
central register of beneficial owners (CRBR)
register of entities dealing with virtual currencies (including cryptocurrency)

Consumer credit

The Polish Consumer Loan Act of 12th May 2011 implements into the Polish legal system the Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC. The Consumer Loan Act regulates the following fields:

  • types of entities allowed to grant consumer loan in Poland
  • terms of granting consumer loan in Poland (including the limitation of non-interest loan costs)
  • types of consumer loans (cash loans, payday loans, credit cards, savings
  • and credit accounts, revolving loans, deferred payment agreements)
  • consumer’s right of withdrawal from the consumer loan agreement
  • KNF-held register of lending institutions
  • legal requirements for lending institutions

FinTech Regulator – Financial Supervision Committee (KNF)

Polish Financial Supervision Committee (KNF) is the authority competent to supervise Polish domestic institutions within the meaning of EU regulations. Established under the Act of 21 July 2006 on financial market supervision, KNF was given the tasks related with:

  • supervision over the domestic institutions (including: banks, insurance companies, pension funds, investment firms, payment services providers, electronic money institutions, lending institutions, cooperative credit unions etc.)
  • licensing of supervised institutions
  • maintaining register of supervised institutions
  • providing education and training for market participants
  • issuing guidelines and communications addressed to supervised institutions

The Commission and the Chairman of the Commission perform their tasks with the assistance of the Polish Financial Supervision Authority Office (UKNF). The work of the KNF is managed by the Chairman and his / her three deputies.

KNF FinTech Sandbox

On 25th November 2020 KNF announced that it launched a PSD2 Directive compliant testing environment available for both regulated and non-regulated entities (startups). The current tool is described as Virtual Sandbox, which is a test environment that allows participants to simulate banking and other payment operations and test solutions based on the Open API interface, compliant with the Polish API standard and with the PSD2 Directive.

Virtual Sandbox allows simulating basic new PSD2 payment services, including:

  • payment initiation service (PIS),
  • account information service (AIS), and
  • confirmation of the availability of funds (CAF).

What’s crucial, TPP license (third party provider) is not required, whereas the Sandbox itself is made available free of charge.

To participate in the Innovation Hub Program and test their planned services, interested entities should submit an application through a form made available at KNF’s website. Standard access is 90 days, potentially to be extended.

Expert team leader DKP Legal Piotr Putyra
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