Electronic Money Institution / EMI in Poland

1. E-Money Institution or Domestic Payment Institution?

Usual question regarding e-money business in Poland is what characterizes an Electronic Money Institution as opposed to a National Payment Institution and which authorization is more advantageous to obtain?

1.1. E-money definition in Poland

According to Article 2(21a) of the UUP, electronic money should be understood as the monetary value stored electronically, including magnetically, issued, with the obligation to redeem it, for the purpose of making payment transactions, accepted by entities other than solely the issuer of electronic money. In practice, these are funds that can be the subject of a payment transaction.

Two types of such e-money are indicated:

  • stored on devices referred to as electronic purses, e-purses or electronic wallets (usually in the form of magnetic or microprocessor cards for storing data and fitted with appropriate software), and
  • so-called network or server money, stored on computer hard drives and accessible via the Internet – it is now also possible to provide a service for issuing and handling the trading of such money using blockchain technology.

In addition, attention should be drawn to the very strict treatment of e-money by the Polish regulator, the KNF. Communications of the KNF office suggest that there is a rather narrow official understanding of this concept, namely:

  • Electronic money is not the same as ‘bank money’ i.e. it is not a book entry indicating an obligation on the part of a bank (payment service provider) to pay a certain amount of money. Unlike ‘bank money’, electronic money is monetary value stored electronically, and this storage must be linked to the possession of a specific instrument on which the values are stored or which is used to access the IT resource within which the monetary values are stored;
  • Electronic money is monetary value issued in exchange for tokens (banknotes, coins) or ‘bank money’;
  • Electronic money is issued for the sole purpose of making payment transactions;
  • The acceptance of e-money is not an obligation for every potential payee, it is only an option that the payee can honour if the technical conditions allow it;
  • The use of electronic money (i.e. making payments) can only be made within a kind of closed system composed of an electronic money issuer and its users (payers, acceptors). Therefore, e-money cannot be accepted outside the system – it does not have the characteristic of general acceptability (unlike bank money).

1.2. EMI in Poland and EU

In particular, it should be noted that the Polish definition of electronic money differs somewhat from the definition adopted in 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. Indeed, according to Article 2(2) of that Directive, electronic money means electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions as defined in Article 4(5) of Directive 2007/64/EC, and accepted by natural or legal persons other than the electronic money issuer

1.3. Issuers of e-money in Poland

Issuers of e-money can be the following entities:

  1. domestic bank within the meaning of Article 4(1)(1) of the Banking Law;
  2. branch of a foreign bank within the meaning of Article 4(1)(20) of the Banking Law;
  3. a credit institution within the meaning of Article 4(1)(17) of the Banking Law and, respectively, a branch of a credit institution within the meaning of Article 4(1)(18) of the Banking Law;
  4. an electronic money institution and a branch of an electronic money institution, where the branch is located in a Member State and such electronic money institution’s head office is located outside the Member State, insofar as the payment services provided by the branch are related to the issuance of electronic money;
  5. domestic payment institution (albeit with significant limitations);
  6. the European Central Bank, hereinafter referred to as the “ECB”, the National Bank of Poland, hereinafter referred to as the “NBP”, and the central bank of a Member State other than the Republic of Poland when not acting in their capacity as monetary authorities or public administrations;
  7. public administration body.

A dedicated organizational form for an e-money issuer is an e-money institution – EMI.

1.4. E-money issued by National Payment Institution

According to Article 2(10a) of the UUP, on the other hand, an electronic money institution should be understood as a national electronic money institution (“EMI“) and an EU electronic money institution.

It should be made very clear that in Poland, the issuing of electronic money may also be carried out by a domestic payment institution (KIP), but subject to certain statutory restrictions. The basic and key limitation is the permissible average value of electronic money issued by a KIP calculated for a given calendar month, which may not exceed the equivalent in Polish currency of EUR 5,000,000.

The second key limitation of the KIP in issuing e-money is that it cannot be issued outside the territory of Poland. This is evidenced by the wording of Article 73a (2), but also the meaning of Article 91 of the UUP. The first provision explicitly states that the e-money institution may issue electronic money only within the territory of the Republic of Poland. The wording of Article 91, in turn, implies the possibility for an EMI to provide payment services in the territory of another Member State through a branch, as part of cross-border activity, or through an agent, but there is no mention of services of issuing or redeeming electronic money in this provision.

1.5. E-money Institution / EMI – definition

Thus, in order to avoid restrictions of both types, the legal trader should apply for authorization from the KNF to issue electronic money and to provide payment services as a domestic electronic money institution – regulated in Section VIIA of the UUP.

A requirement for applying for such a status is the initial capital, which must correspond to at least the equivalent in Polish currency of the amount of EUR 350,000 determined using the average exchange rate announced by the National Bank of Poland (NBP) in force on the day the permit is issued (Article 132b(1) UUP). This is almost three times higher threshold than in the case of KIP (the Polish currency equivalent of EUR 125,000).

Most of the provisions containing the documentary requirements necessary to obtain a license for a KIP apply to EMI accordingly. The licensing process for e-money institution is described in detail below.

Importantly, electronic money institution can also provide payment services – without limitation.

2. EMI services

2.1. E-money issuance and redemption

The core business of EMI is the issuance and redemption of electronic money. The issuer of electronic money is obliged to issue electronic money immediately at par value from the moment it receives the funds allocated for that purpose. It is considered that, despite the difference between the Polish statutory term “issuance” of electronic money from the concept of “issue” found in the EMD2 Directive, “issuance” consists of the authorized issuer’s recording of the monetary value constituting electronic money

In other words, previously non-existent e-money is created by the issuer in exchange for funds (means of payment) – so that it can then become the subject of payment transactions and redeem the liabilities of its holder on a regular FIAT money basis. Moreover, the issuance of electronic money entails, as it were, an automatic obligation to redeem it.

However, it should be noted again that in the Polish reality determined in particular by the communications of the KNF, the creation of monetary value takes place only for the purpose of its use for payment transactions in its closed system. Indeed, electronic money can only be used to make payments to entities bound to the issuer by an appropriate legal relationship on the basis of which they accept the electronic money in question and have the possibility of redeeming it at a later date, as well as having the technical capabilities to receive electronic money from the holder.

Redemption of e-money at the holder’s request must be made possible by the issuer at any time, at its face value for cash that is not e-money.

An e-money issuer may charge a fee for redeeming e-money – provided that the issuance contract so provides. The terms of redemption, including precisely the fee for doing so, shall be set out in the contract. The contract must regulate these matters in a clear and comprehensible manner. Information about the redemption must be provided to the user by the issuer at the latest when the proposal to conclude it is made. The parties are free to agree on terms of redemption other than those provided for in the UUP, provided that the e-money user is not a consumer.

Significantly, the provisions of the UUP do not provide for the distribution of electronic money. Thus, in the current state of the law, the conduct of electronic money distribution by a distributor under UUP is treated as the outsourcing of operational activities to EMI – i.e. as outsourcing regulated in Article 86 and consecutive UUP.

It is worth mentioning that the issuance of e-money itself cannot take place through agents or other entities. The claim for the redemption of e-money is time-barred 5 years after the expiry of the contract for its issuance.

2.2. Payment services

E-money institution may be a payment service provider – as stated in Article 4(2)(4) of UUP. This means that e-money institution may also provide the payment services listed in Article 3(1) of UUP. Payment services are understood as activities consisting in:

  1. accepting cash deposits and making cash withdrawals from the payment account and all activities necessary for the operation of the account;
  2. the execution of payment transactions, including the transfer of funds to a payment account with the user’s provider or with another provider:
    • by carrying out direct debit services, including one-off direct debits
    • by using a payment card or similar payment instrument
    • by carrying out credit transfer services, including standing orders;
  3. the execution of the payment transactions listed in point 2, against funds made available to the user by virtue of credit, or, in the case of a payment institution or electronic money institution, a credit as referred to in Article 74(3) or Article 132j(3) UUP;
  4. issuing payment instruments
  5. enabling the acceptance of payment instruments and the execution of payment transactions initiated with a payment instrument of a payer by or through a merchant, consisting in particular of the handling of authorization, the sending to the issuer of a payment instrument, or to payment systems of payment orders of a payer or a merchant, with a view to remitting to the merchant the funds due to him, excluding the activities of clearing and settling these transactions within a payment system within the meaning of the Act on Final Settlement (acquiring);
  6. the provision of a money remittance service;
  7. the provision of a payment transaction initiation service;
  8. the provision of an account information service.

2.3. Non-payment services

Pursuant to Article 132j(1) of the UUP, an electronic money institution may, in addition to its activities of issuing electronic money and providing payment services:

  1. provide additional services closely related to the issuance of electronic money and the provision of payment services, such as:
    • currency exchange services
    • services for the safe custody of funds transferred for the execution of a payment transaction,
    • data storage and processing services;
  2. run payment systems;
  3. carry out other business activities

In turn, according to Article 132j(3) of the UUP, in connection with the provision of payment services, an electronic money institution may grant payment credit as referred to in Article 74(3) only for the purpose of providing the payment services referred to in Article 3(1)(3) to (5) and (7) and provided that the credit is not granted:

  • for more than 12 months;
  • from funds received or held for the purpose of executing a payment transaction.

3. Requirements

3.1. Shareholders, beneficial owners and directors

 The e-money institution licensing process, must provide data allowing the identification of managers and persons who directly or indirectly hold a significant stake in the company, with an indication of the size of the stake held by them.

In addition, the e-money institution must provide the KNF with documents and information allowing it to assess whether the entity and the persons referred to above give assurance of prudent and stable management of the EMI, in particular:

  1. documents allowing the assessment of whether the managers have the necessary education and professional experience to manage the activity of issuing and redeeming electronic money,
  2. information on convictions for a criminal or fiscal offense, on conditional discontinuance and disciplinary proceedings with sanctions, as well as other completed administrative and civil proceedings concerning the applicant or the persons concerned,
  3. information on pending criminal proceedings for an intentional crime, with the exception of crimes prosecuted by private prosecution, proceedings for fiscal offenses, as well as pending administrative, disciplinary, and civil proceedings – against these persons or relating to their activities or those of the applicant.

What, in practice, will comprise of the material to demonstrate that the named persons give assurance of prudent and stable management of the EMI?

These will be the data and documents required by the provisions of the Regulation of the Minister of Finance, Funds and Regional Policy on the detailed scope of information and the type and form of documents attached to the application for a permit to operate as a domestic payment institution of 13 November 2020, as duly applied to EMI. (Journal of Laws of 2020, item 2225), i.e.: personal data, curriculum vitae, information on pending and completed proceedings, certificates of no criminal record from relevant offices, information on supervisory measures against another entity with which the analysed person is related in the manner specified in the provisions of the Regulation.

Positive verification by UKNF of the silhouette of the shareholder (beneficial owner) and board member so presented is a prerequisite for obtaining e-money institution status.

The Corporate Governance Principles for Supervised Institutions (doc. adopted by resolution of the KNF of 22 July 2014 and effective from 1 January 2015) require that EMI shareholders:

  1. have worked together to achieve its objectives,
  2. ensured the safety of its operation,
  3. did not exert undue influence on EMI,
  4. were guided in their decisions by the interests of EMI,
  5. effectively used corporate governance to ensure the proper functioning of the governing body (and supervisor if appointed) of the supervised institution,
  6. did not interfere in the management of EMI, including the management of the board’s affairs,
  7. did not take advantage of their position in transferring assets from EMI to other entities one to acquire or dispose of EMI’s assets on conditions other than at market conditions,
  8. were responsible for recapitalizing EMI when necessary to maintain its equity,
  9. provide EMI with immediate financial support when necessary to maintain liquidity at the level required by law or supervisory regulations, and when the safety of EMI so requires.

3.2. Significant officers

The internal structure of a supervised institution such as e-money institution is determined, among other things, by the Corporate Governance Principles for Supervised Institutions. From the content of the document emerge good practices and principles that should also guide EMIs in arranging their activities.

First and foremost, the EMI Board must be collegiate in nature and its members must have the competence to manage the affairs of the supervised institution arising from:

  • knowledge (possessed by virtue of education, training, professional titles obtained and otherwise acquired in the course of one’s career)
  • experience (acquired in the course of holding certain functions or positions)
  • the skills necessary to perform the function entrusted to them.

The composition of the Management Board should include an appropriate proportion of persons who speak Polish and have the relevant experience and knowledge of Polish financial market necessary for the management of a supervised institution in the Polish financial market

A model example of an EMI board is a three-member board in which at least two of the three board members (at least half) speak Polish and demonstrate knowledge of the Polish financial market.

The role of the chairman of the board of directors should be separate in its composition. EMI should also ensure within its organisation:

  1. the function of ensuring compliance of the supervised institution with laws and internal regulations and taking into account supervisory recommendations (compliance),
  2. an effective, efficient and independent internal audit function to examine, in particular, the adequacy, effectiveness, and efficiency on a regular basis of, in particular, the internal control system, the compliance function, and the risk management system,
  3. risk management function,
  4. the function of the responsible person – i.e. the designation by the Board of Directors of one of the members referred to in Articles 6 and 7 of the UAML as the person responsible for the performance of the obligations set out in the internal procedure of the obliged institution for the counteracting of money laundering and terrorist financing and in the AML/CFT Law.

3.3. Capital requirements

Above we have already indicated that an EMI must have an initial capital of at least the equivalent in Polish currency of EUR 350,000 determined using the average exchange rate announced by the National Bank of Poland (NBP) in force on the day the authorisation is issued.

However, it should be pointed out that these are not the only capital requirements for EMIs. Pursuant to Article 132m UUP, EMI is required to hold at all times its funds adapted to the size of its electronic money and payment services business and to the type of payment services it may provide on the basis of authorization.

What does the concept of own funds mean in practice?

According to the applicable Article 76(2) of the UUP, EMI’s own funds include:

  • EMI’s initial capital;
  • revaluation reserve for property, plant, and equipment;
  • retained earnings;
  • the profit under approval and net profit for the current reporting period, calculated in accordance with the applicable accounting principles, less any anticipated charges and dividends, in amounts not exceeding the profit amounts reviewed by the auditors;
  • reserve capital;
  • other reserves.

These funds are reduced by:

  • own shares held by EMI, valued at their carrying amount, less any write-downs due to permanent impairment;
  • any liabilities in respect of preference shares;
  • intangible assets measured at carrying value;
  • loss from previous years;
  • loss during approval;
  • the net loss of the current period.

EMI is also bound by the general rule expressed in Article 132m(2) UUP stating that the amount of EMI’s own funds may not be lower than the higher of the respective values:

  • the minimum amount of initial capital,
  • a minimum amount of own funds that is the sum of:
    • the amount of own funds allocated to electronic money activities,
    • the amount of own funds earmarked for the non-electronic money payment services business calculated in accordance with the regulations issued under paragraph 7 (the latter provision constitutes a statutory delegation to the Minister responsible for financial institutions to determine, after consulting the KNF, by regulation, the method of calculating that amount, taking into account that it should not exceed 4% of one-twelfth of the total value of payment transactions executed during the last year by EMI, and taking into account the type of payment services it may provide under its license)

What is particularly important is that the KNF may, by decision, on the basis of a loss risk analysis and an assessment of the risk management processes and internal control mechanisms of the domestic electronic money institution, either require an increase or allow a decrease in the amount of own funds up to certain percentage thresholds.

4. EMI licensing process

Pursuant to Article 132a(1) of the UUP, the issuance of electronic money and the provision of payment services as a domestic electronic money institution requires a permit from the KNF. An EMI authorization may be issued to a legal person with a registered office in the territory of the Republic of Poland, upon its application.

4.1. E-money license application

The application for a permit must include the following data and documents:

  1. registered address;
  2. statutes, articles of association, or memorandum of association;
  3. a list of the e-money services (and possibly payment services) it intends to provide;
  4. a program of operations and a financial plan for a period of at least three years, showing that the applicant is able to employ the appropriate and proportionate systems, resources, and procedures necessary for the proper performance of its activities – whereby the programme of operations and financial plan shall also indicate the planned average outstanding electronic money;
  5. proof of own funds in the required amount;
  6. a description of the risk management and internal control system referred to in point 3 of Article 64(1), including the approved internal rules in this area;
  7. a description of the close links between the applicant and other entities, if any;
  8. data that make it possible to identify the directors and persons who, directly or indirectly, have a qualifying holding in a company or cooperative wishing to provide electronic money services (possibly related payment services), indicating the size of their holding, including:
    • name or business name;
    • registered office and address or place of residence and address;
  9. documents and information making it possible to assess whether the applicant and the persons referred to in point 8 give the necessary guarantees for the prudent and sound management of the EMI, in particular:
    • documents allowing to assess whether the managers have the necessary education and professional experience to manage the business of issuing electronic money (and possibly providing payment services, if any)
    • information on convictions for a criminal offense or a tax offense, proceedings with probation and disciplinary proceedings with sanctions, and other administrative and civil proceedings concluded concerning the applicant or persons referred to in point
    • information on pending criminal proceedings for an intentional crime, with the exception of crimes prosecuted by private prosecution, proceedings for fiscal offenses, as well as administrative, disciplinary, and civil proceedings brought against the persons referred to in point 8 or relating to their activities or those of the applicant;
  10. data to identify auditors and audit firms, including:
    • the name of the statutory auditor or audit firm,
    • the address of the statutory auditor or the address of the audit firm,
    • the number of registration in the register of statutory auditors or the number of registration in the list of audit firms;
  11. where the intention is to provide the service of initiating a payment transaction, a document providing evidence of liability insurance, a bank guarantee, an insurance guarantee, or any other guarantee of the user’s claims.

What is covered by each category of information and document listed in items 1-11) is provided for in the duly applicable Regulation of the Minister of Finance, Funds and Regional Policy on the detailed scope of information and the type and form of documents attached to the application for a permit to operate as a domestic payment institution of 13 November 2020 (Journal of Laws of 2020, item 2225), issued on the basis of Article 61(3) of the UUP.

4.2. E-money licensing conditions

In addition, Article 64(2) to (10) of the UUP concerning EMI applies mutatis mutandis to e-money institution which states that authorisation (e-money license) may be issued if the applicant:

  1. has own funds in the required amount;
  2. ensure the prudent and sound management of the activities covered by the application for authorisation, in particular by having in place a risk management and internal control system appropriate to the nature, scale, and complexity of the (payment) services provided, ensuring that, inter alia, obligations in relation to the prevention of money laundering and terrorist financing are duly fulfilled, and including organisational arrangements to safeguard users’ funds
  3. it is managed by persons giving the guarantee of prudent and stable management of its activities;
  4. has the financial means to cover the initial capital not derived from the credit, loans or otherwise unencumbered and not derived from illegal or undisclosed sources;
  5. has a financial plan or programme of operations to ensure that the EMI is able to fulfil the obligations arising from the activities for which authorisation is sought;
  6. does not have close links with third parties that constitute an obstacle to the effective exercise of supervisory functions;
  7. does not have close links with third parties where the provisions of the law of a country other than a Member State applying to one or more natural or legal persons with which the applicant has close links or difficulties involved in their enforcement, would prevent the effective exercise of supervision over the EMI;
  8. ensure that the requirements set out in the provisions of Commission Delegated Regulation (EU) 2018/389 of 27 November 2017 supplementing Directive (EU) 2015/2366 of the European Parliament and of the Council with regard to regulatory technical standards for strong customer authentication and common and secure open communication standards are met;
  9. has third-party liability insurance, a bank guarantee, an insurance guarantee, or other security for user claims when providing the service of initiating a payment transaction.

4.3. Additional implied conditions

For the licensing process and the day-to-day operations of EMI, in many places, the provisions of EMI should be applied accordingly. What does this mean in practice? If EMI intends to provide an acquiring service, a favorable opinion from the NBP obtained in the course of the proceedings is necessary for this;

  1. When providing the service of initiating payment transactions, EMI is obliged to conclude a contract of third-party liability insurance for damages arising in connection with the activity performed by EMI or to have a bank guarantee, an insurance guarantee, or other security for the user’s claims, with the content of the contract to include the elements specified in Article 61b of the UUP;
  2. In the course of the authorisation proceedings, the KNF shall call upon the applicant to supplement the application that does not meet the requirements of Article 61(1) of the UUP, and may also request supplementary information or documents necessary to resolve the case;
  3. The KNF issues its decision on the authorisation within three months of receipt of the application or its supplementation, and in the authorisation itself the KNF specifies the e-money services (including payment services, if any) that the payment institution is authorised to provide;
  4. The KNF shall refuse to issue an authorisation if the applicant does not meet the requirements set out in Article 64(1) of the UUP;
  5. A change to the services described in the authorisation requires an amendment to the authorisation itself, with a written declaration of validity being sufficient to the extent that the documentation and information originally provided to the KNF has not changed;
  6. A permit shall expire if the EMI has not commenced the activity covered by the permit within 12 months from the date of issue of that permit or if it does not carry out the activity covered by the permit for more than 6 consecutive months – the expiry of the permit shall be determined by a decision;
  7. EMI may lose its authorisation if:
    • has obtained an authorisation as a result of false information or by any other unlawful means;
    • no longer complies with the requirements on which authorisation is conditional, or has failed to notify the KNF of material circumstances which indicate that it no longer complies with those requirements;
    • carries out its activities in breach of its authorisation or has permanently lost its ability to fulfil its obligations;
    • continuing to provide payment services or issue electronic money would jeopardize the stability of or confidence in the payment system;
    • persons who directly or indirectly hold a substantial shareholding in EMI do not warrant the prudent and stable management of EMI;
    • the manager does not give an assurance of prudent and stable management of the EMI;
    • close links between KIPE and other entities could prevent effective supervision of EMI;
    • provisions of the law of a country other than a Member State that apply to one or more natural or legal persons with which the EMI has close links, or difficulties involved in the enforcement of those provisions could prevent the effective exercise of supervision over that institution;
    • if the EMI does not apply the measures for the protection of users’ funds set out in Article 78(1) and, despite having failed to conclude a bank or insurance guarantee contract or an insurance contract as referred to in Article 78(2) of the UUP on time – whereas:
      • the decision to withdraw the authorisation shall be immediately enforceable.
      • if the interest of the users or holders of electronic money so require, the KNF may, in its decision to withdraw the authorisation, specify the date and conditions for the EMI to cease providing payment services or issuing electronic money.
    • in addition, the KNF revokes the authorisation at the request of EMI.

It is additionally a condition for granting authorisation to a EMI that the entity has organisational arrangements in place to protect funds received in exchange for electronic money issued in accordance with Article 132n of UUP. In addition, the KNF may also withdraw the authorisation if a EMI that does not apply the rules for the protection of funds received in exchange for electronic money issued, as set out in Article 132n (1) of UUP, has not concluded a bank or insurance guarantee agreement or an insurance contract, as referred to in Article 78 (2), in accordance with Article 132n (2) of UUP, within the deadline.

5. EMI supervision

5.1. Scope of supervision

Pursuant to Article 132z(1) of the UUP, the activities of issuing electronic money and providing payment services carried out by EMI, including their agents and other entrepreneurs through which the EMI provides payment services or redeems electronic money, as well as entities performing certain operational activities under the agreement referred to in Article 132v(1), are subject to supervision by the KNF, to the extent and under the rules set out in the UUP and the Financial Market Supervision Act.

According to Article 132z(2) of the UUP, the purpose of the KNF’s supervision of EMI is:

  • ensuring the financial security of EMI;
  • to ensure that the activities of EMIs, including those carried out by their agents and other businesses through which KIPEs provide payment services or redeem e-money, and entities performing certain operational activities under an outsourcing arrangement (as defined in Article 132v(1) of the UUP), comply with the provisions of the UUP, Regulation (EC) No 924/2009 of the European Parliament and of the Council of 16 September 2009. on cross-border payments in the Community and repealing Regulation (EC) No 2560/2001, Regulation (EU) No 260/2012 of the European Parliament and of the Council of 14 March 2012 establishing technical and business requirements for credit transfers and direct debits in euro and amending Regulation (EC) No 924/2009 and Regulation (EU) 2015/751 and the authorisation referred to in Article 132a(1);
  • protecting the interests of users and holders of electronic money.

The supervision of the KNF consists of:

  • assessing the financial position of EMI;
  • examination of the quality of EMI’s governance, including the risk management and internal control system.

The KNF and the persons carrying out supervisory activities shall not be liable for any damage resulting from an act or omission in accordance with the provisions of the Acts, which remains in connection with the supervision exercised by the KNF.

The KNF, as part of its supervision, may:

  • request EMI to provide, within a specified period of time, any information necessary to achieve the objectives of the surveillance, specifying the purpose of the request;
  • require periodic reporting by EMI of certain data necessary to assess EMI’s financial position;
  • Order EMI to develop and implement a plan to restore sound financial relations.

5.2. Inspections of e-money institution

The KNF may carry out an inspection of the activities and financial situation of a EMI, including an assessment of the activities and financial situation of the agent through which the EMI provides the services covered by the authorisation, or of the entity performing operational activities under an outsourcing contract. If this inspection does not allow to make all the findings necessary for the assessment of the activity or financial situation of the agent or insourcer, the inspection activities may be carried out directly against the agent or insourcer, as part of a separate inspection

Inspection activities shall be carried out by employees of the Office of the KNF upon presentation of an official ID card and delivery of an authorisation issued by the Chairman of the KNF or a person authorised by him.

The employees of the KNF are entitled to:

  • access to the premises of the inspected entity;
  • free access to a separate office and communications facilities;
  • to inspect the controlled entity’s documents and to request copies, duplicates and extracts of such documents;
  • to inspect the data contained in the controlled entity’s computer system and to request copies or extracts of such data, including in the form of electronic documents.

The control / inspection shall be carried out with appropriate application of the provisions of Chapter 5 of the Act of 6 March 2018. – Entrepreneurs’ Law and in accordance with the provisions of the Regulation issued pursuant to Article 103(6) of the UUP.

5.3. Recommendations to e-money institutions

The KNF, as part of its supervision of EMI, may make recommendations to EMI to:

  1. ensure that the activities of the national electronic money institution comply with the provisions of the Act, Regulation (EC) No 924/2009 of the European Parliament and of the Council of 16 September 2009 on cross-border payments in the Community and repealing Regulation (EC) No 2560/2001 and Regulation (EU) No 260/2012 of the European Parliament and of the Council of 14 March 2012 establishing technical and business requirements for credit transfers and direct debits in euro and amending Regulation (EC) No 924/2009,
  2. increase the own funds if their amount is lower than it would result from the provisions of the Act or the decision referred to in Article 132m(8),
  3. take the measures necessary to achieve and comply with the standards referred to in Article 132b(1) and Article 132m,
  4. develop and apply procedures to ensure that the level of own funds is maintained and monitored on an ongoing basis,
  5. take such measures as are necessary to prevent prejudice to the interests of users and holders of electronic money;
  6. order a national electronic money institution to withhold its profits or to suspend the creation of new business units until the standards referred to in Articles 132b(1) and 132m have been reached.

The KNF may issue recommendations on good practices for the prudent and stable management of domestic electronic money institutions, with a view to protecting the interests of electronic money holders and users.

5.4. Sanctions and license revocation

If a EMI does not perform or improperly performs its obligation to provide information or data to the KNF or has not carried out its recommendations within the prescribed time limit, hinders or prevents the performance of inspections, or fails to comply with orders issued by the KNF, and if the EMI’s activities are performed in violation of the law or pose a threat to the interests of electronic money users or holders, the KNF may:

  • request the EMI body to dismiss the manager directly responsible for the irregularities found;
  • suspend the manager, pending a resolution on the proposal for his or her removal by the EMI bodies at their next meeting; suspension consists of exclusion from decision-making for EMI with regard to its property rights and obligations;
  • limit the scope of activities of EMI or its organisational units.

Decisions of the KNF in this respect are immediately enforceable, whereby the KNF’s decision to limit the scope of activities may contain conditions and deadlines.

In addition, the KNF may:

  • impose on the manager directly responsible for the irregularity found a fine of up to three times that person’s gross monthly salary, calculated on the basis of the average gross salary for the last 3 months before the penalty was imposed;
  • impose a fine of up to PLN 1,000,000 on EMI;
  • revoke the authorisation granted to EMI.

The KNF may also suspend a manager in the event of:

  • pressing charges against that person in criminal proceedings or in proceedings for a fiscal offence;
  • causing significant property damage to EMI by that person.

6. Reporting obligations

6.1. Annual accounts

 The EMI shall submit annual financial statements and annual consolidated financial statements to the KNF in accordance with the Accounting Act. The reports shall be forwarded, together with the audit report and a copy of the resolution or order of the approving authority approving the financial statements, within no more than 15 days from the date of approval of the annual financial statements by the approving authority of the EMI and the annual consolidated financial statements by the approving authority of the EMI parent company, respectively.

The audit firm is obliged to immediately inform the KNF of circumstances and events identified in the course of the audit of the financial statements that may provide grounds for the issuance of an opinion with reservations, a negative opinion or a refusal to give an opinion, or that may indicate a breach of the provisions setting out the conditions for issuing an EMI authorisation or regulating the conduct of EMI’s business or a threat to the continuation of the institution’s business.

EMI also provides quarterly and additional annual financial and statistical reports covering the following data:

  1. the value of funds held;
  2. information on the loans referred to in Article 74(3) granted during the quarter or year, including their number, value and duration;
  3. information on executed payment transactions, including their value, number and currency structure;
  4. a statement of own funds with an indication of the various components and an indication of their amount;
  5. with the proviso that the KNF, by decision, at the request of the EMI, may, in justified cases, exempt it from these obligations or limit their scope.
  6. information on the type and scope of activities referred to in Article 132j(1) of the UUP, i.e. the following services (if it provides them):
    • currency exchange services,
    • services for the safe custody of funds transferred for the execution of a payment transaction,
    • data storage and processing services;
    • operation of payment systems
    • carrying out other economic activities

6.2. Quarterly reports to the NBP

Pursuant to Article 14c(1) of the UUP, the electronic money issuer is obliged to submit quarterly information to the NBP on the value of outstanding electronic money issued. If the electronic money issuer issues, at the same time, a payment instrument on which the electronic money issued by it is stored, the information additionally includes information on these instruments to the following extent:

  1.  the type and number of payment instruments issued;
  2. the number of devices accepting issued payment instruments and the number of devices allowing such instruments to be re-fuelled;
  3. the number and value of payment transactions executed with the payment instruments issued;
  4. the number and value of top-up transactions on the payment instruments issued;
  5. the number and value of payment transactions carried out with the payment instruments issued which contravene legislation or the rules of fair trading and the amount of losses caused thereby.

According to Article 14a of the UUP, EMI, which is a settlement agent, i.e. which provides acquiring services, is obliged to submit quarterly information to the NBP (National Bank of Poland), including:

  1. the number of merchants to which it provides an acquiring service and the number of payment instrument accepting devices used by these merchants;
  2. the number and value of executed payment transactions to which the acquiring service related;
  3. the number and value of payment transactions carried out in breach of the law or the rules of fair trading and the amount of losses caused by them to the settlement agent and merchants.

The aforementioned Article 14b (this time paragraph 1) of UUP is also separately applicable if the EMI is the issuer of a payment instrument other than the one on which it stores the electronic money issued by it. In that case, the EMI is separately obliged to provide the NBP with quarterly information including:

  1. the type and number of payment instruments issued;
  2. the number and value of payment transactions executed with the payment instruments issued;
  3. the number of ATMs made available and the number and value of payment transactions made using them;
  4. the number and value of payment transactions carried out with the payment instruments issued which contravene legislation or the rules of fair trading and the amount of losses caused thereby.

All the aforementioned information submitted to the NBP is submitted in electronic form using appropriate certificates issued by the NBP or other forms of authentication used by the NBP – as provided for in Article 14ca of the UUP. In practice, the submission of reports is carried out in the manner described on the website of the National  Bank of Poland            website: https://www.nbp.pl/home.aspx?f=/systemplatniczy/sprawozdawczosc.html

7. Internal policies

EMI should have and update the following internal policies and procedures:

7.1 Programme of activities for a period of at least three years

A programme of activities for a period of at least three years, which demonstrates that the EMI is able to apply appropriate and proportionate systems, resources and procedures necessary for the proper conduct of its activities covering:

  1. a description of the objectives of the strategy including:
  2. marketing plan;
  3. operational plan;
  4. an organisation and management plan including:
    • a diagram and description of the applicant’s organisational structure including:
      • a description of the functions and duties of each unit, cell or autonomous position within the applicant’s organisational structure,
      • the definition of the powers and organisation of the Management Board, its composition and the distribution of powers among its individual members,
  • the definition of the powers, organisation and composition of the applicant’s internal control, supervisory board or audit committee, if any, including the identification of persons or organisational units exercising the supervisory function, such as independent members or committees
  1. identification of key functions within the organisation, including organisational positions other than those of members of the management board, the supervisory board and the audit committee, which have duties, powers and responsibilities that make it possible to exercise a significant influence over the management of the applicant’s activities, particularly as regards accounts and internal audit,
  2. description of the management system and systems providing information to support management,
  3. a description of the relationship with the parent company and the other entities in the group, together with a graphical organisation chart of the group indicating the parent company within the group – if the applicant is part of a group;
  • information on employment and employment policy objectives;
  • a list of all internal regulations of the applicant, including strategies, policies, procedures, instructions and methodologies relating to the payment services business;
  • a description of the arrangements for entrusting other undertakings with certain operational activities in relation to the provision of payment services including:
    1. the outsourcing policy, indicating the persons within the applicant organisation responsible for the outsourced activities (name and function within the applicant organisation), – the outsourcing policy
    2. a description of the operational activities which the applicant plans to entrust to other entities, including an indication of the main characteristics of these activities and a description of the principles for qualifying the operational activities as relevant within the meaning of Article 86 of the Act,
  • a list of the entities to which the applicant intends to entrust certain operational activities related to the provision of payment services, including information enabling their identification, including their name (business name) and Tax Identification Number (NIP);
  1. rules for the conduct of business through agents or branches, including:
    1. policy on the use of agents or branches,
    2. a plan of inspections, including remote and on-site inspections, which the applicant intends to carry out at least once a year in relation to branches and agents, and their planned frequency,
    3. a description of the information systems, processes and infrastructure used by the applicant’s agents to carry out activities on behalf of the applicant,
    4. recruitment rules, monitoring and training procedures for agents and, where available, draft terms of cooperation;
    5. indication of the national or international payment system(s) to which the applicant has or plans to have access, if applicable.
  2. a timetable setting out the planned dates for achieving the various business milestones and strategic objectives set out in the business plan;
  3. date of drafting and indication of the authors of the activity programme (name and function within the organisation)

and

  • a financial plan, also referred to in Article 61(1)(4) of the UUP, corresponding in scope to the programme of activities;
  • a description of the risk management and internal control system referred to in Article 61(1)(6) of the UUP, including other minor procedures:
  1. in terms of organisational arrangements:
    • a description of the applicant’s organisation, indicating its structure, units, departments, functions, hierarchy, reporting lines and information flows,
    • approved decision-making procedures covering the full range of activities,
    • principles and procedures for fulfilling the obligations of obliged institutions within the meaning of the Act of 1 March 2018 on Combating Money Laundering and the Financing of Terrorism (Journal of Laws of 2020, item 971, 875 and 1086);
  2. in terms of risk management principles, a definition of the risks identified by EMI, a description of how they are identified, measured, estimated, monitored, controlled and mitigated, and the approved procedures for doing so;
  3. on internal control:
    • principles for testing and evaluating independently and objectively the adequacy and effectiveness of the system of risk management and internal control, together with approved procedures in this regard,
    • rules for identifying, assessing, controlling and monitoring compliance of the activities carried out with the Act, the provisions of the Act of 1 March 2018 on Combating Money Laundering and the Financing of Terrorism , internal regulations and standards applicable in the payment services market;
  4. a description of the rules for the handling of funds accepted for the execution of payment transactions, in accordance with Article 132n of the UUP, together with the approved internal regulations in this regard;
  5. a procedure for monitoring security incidents and for monitoring, investigating and following up on user complaints, including security-related complaints, including:
  6. a system of internal communication including rules for transmitting information relevant to the organisation and operation of the applicant;
  7. the procedure or procedures for carrying out periodic and permanent inspections, including information on the frequency with which they are carried out and the number of persons carrying out the tasks;
  8. the accounting procedure or procedures under which the applicant will record and report its financial information;
  9. a description of how to monitor and control the activities, actions and tasks outsourced to another trader in relation to the provision of payment services in order to avoid deterioration of the applicant’s internal control;
  10. a description of how agents and branches are monitored and controlled as part of internal control;
  11. a description of the management of the group when the applicant is a subsidiary of an entity which is authorised or registered by the competent supervisory authorities to operate in the financial market
  12. a procedure for documenting, monitoring, tracking and restricting access to sensitive payment data:
    • definitions of the basic concepts contained in the procedure,
    • description of the flow of data classified as sensitive payment data in the context of the applicant’s business model,
    • description of monitoring tools,
    • rules and procedures for obtaining access rights to payment sensitive data, specifying the right of access to all relevant infrastructure components and systems, including databases and backups,
    • a description of how the data collected will be documented and stored,
    • information on the intended internal or external use of the collected data, including by entities cooperating with the applicant,
    • information on the intended internal or external use of the collected data, including by entities cooperating with the applicant,
    • description of the IT system and technical protection measures put in place, including encryption or generation of digital equivalents,
    • rules for the identification of persons and bodies or other organisational units of the applicant having access to sensitive payment data,
    • clarify how violations will be detected and followed up,
    • information on the annual internal control programme for information systems security;
  13. business continuity solutions for the applicant including:
    • an analysis of the impact of a major event on operations that could cause disruption or interruption of operations, including the identification of:
      1. recovery time parameters (Recovery Time Objective),
      2. an acceptable level of lost data expressed over time (Recovery Point Objective),
  • protected assets,
  • identification of the emergency back-up system and its location, indication of the rules for access to the IT infrastructure, and identification of the key software and data that will be recovered after a system failure or disruption,
  • an explanation of what action will be taken in the event of a major event or disruption affecting business continuity, such as failure of key systems, loss of key data, lack of access to premises or loss of key people,
  • an indication of the frequency with which the applicant intends to verify the business continuity arrangements and the recovery plans, including how the results of the verification will be recorded,
  • a description of measures adopted by the applicant to ensure fulfilment of outstanding payment transactions and termination of existing contracts in the event of termination of payment services;
  1. rules for the collection of statistics on business performance, transactions and fraud, including supporting documents such as instructions, methodologies and a description of the system put in place for the collection of data and specifying:
    • definitions of key concepts contained in the principles,
    • the type of data collected on customers, the type of payment services, the distribution channels of the services, the payment instruments, the areas of operation and the currencies in which payment transactions will be made,
    • the extent of data to be collected in relation to specific activities and entities, including branches and agents, if the applicant intends to carry out activities through branches or agents,
    • means and methods of data collection,
    • purpose of data collection,
    • frequency of data collection;
  2. security policy containing:
  • a detailed analysis and assessment of the risks in relation to the payment services which the applicant intends to provide, including the control, security and risk mitigation measures taken to adequately protect the customers of the applicant from the identified risks indicated in the application file, taking into account all risks,
  • description of information systems including:
  • the type of external connections authorised, in particular with business partners, service providers, group entities and employees working remotely, together with the justification for such connections,
  • for each connection referred to in point (c), the logical security mechanisms and measures,
  • logical security measures and mechanisms governing internal access to information systems,
  • physical security measures and mechanisms for the applicant’s premises and data centre, such as access controls and environmental security,
  • security solutions for the provision of payment services including:
    1. the customer authentication procedure used for both information and transaction access to all available payment instruments,
    2. an explanation of how to ensure the secure transfer of funds to the recipient and information on the integrity of the authentication elements, in particular hardware tokens and mobile applications, both at the time of registration of these elements for a given user and at the time of renewal or renewal in the event of their expiry,
    3. a description of the systems and procedures the applicant has put in place to analyse transactions and identify suspicious or unusual transactions,
  1. a list of the main procedures in relation to the applicant’s information systems or, in the case of procedures which have not yet been implemented, the planned date for their implementation;
  2. internal controls consistent with obligations relating to the prevention of money laundering and terrorist financing including
    • an assessment of the risk of money laundering and terrorist financing, including the risks associated with the applicant’s customer base, the products and services provided, the distribution channels used and the applicant’s geographical areas of operation,
    • measures that the applicant has put in place or will put in place to mitigate risks and meet its obligations in relation to the prevention of money laundering and terrorist financing, including the risk assessment procedures in place, policies and procedures for the application of financial security measures to customers and policies and procedures for the detection and reporting of suspicious transactions, activities or other actions,
    • the systems and control arrangements that the applicant has put in place, or will put in place, to ensure that branches and agents comply with applicable anti-money laundering and anti-terrorist financing legislation, including where the agent or branch operates in another Member State,
    • the arrangements that the applicant has put in place, or will put in place, to ensure that employees and agents are properly trained in AML/CFT matters,
    • data to identify the person responsible for ensuring that the applicant complies with its AML/CFT obligations and evidence that his or her AML/CFT competence is sufficient to ensure the effective performance of those obligations,
    • the systems and control arrangements that the applicant has put in place or will put in place to ensure:
      1. the timeliness and effectiveness of AML/CFT policies and procedures,
      2. that the agents will not expose the applicant to increased money laundering and terrorist financing risks,
    • a handbook for the applicant’s employees on anti-money laundering and counter-terrorist financing.

8. M&A – Electronic Money Institution

8.1 Notification of the KNF

Pursuant to Article 132c of the UUP, an entity that intends to directly or indirectly acquire or take up shares in a EMI in a number that ensures reaching or exceeding, respectively, 10 %, 20 %, 30 %, or 50 %, of the total number of votes in the constituent body or a share in the share capital, or if, as a result of the acquisition or taking up of shares in a KIPE, it would become a subsidiary or co-dependent entity of that entity, is obliged to notify the KNF of such intention each time.

The provisions of Article 25(2), (3) and (7) to (9), Article 25a(1) and (2), Article 25c to 25e and Article 25g of the Banking Law shall apply mutatis mutandis to this type of process, except that the provisions relating to a parent, subsidiary or jointly-controlled entity referred to in those provisions shall apply to the parent, subsidiary or jointly-controlled entity.

Where the entity submitting the notice of intention to acquire is:

  • an EU electronic money institution, an EU payment institution, an insurance undertaking, a reinsurance undertaking, a credit institution, an investment firm or a management company authorised in the territory of a Member State other than the Republic of Poland, or
  • a parent undertaking or an entity in a similar relationship with an EU electronic money institution, an EU payment institution, an insurance undertaking, a reinsurance undertaking, a credit institution, an investment firm or a management company authorised in the territory of a Member State other than the Republic of Poland

– provide, in the notification, appropriate information in this regard, indicating in particular the name and registered office of the entities referred to in point 2 in respect of which it is the parent undertaking or an entity with a similar relationship.

Together with the notification to the KNF, pursuant to Article 132d of the UUP, the notifying entity shall provide the following information:

  • allowing for the identification of the entity submitting the notification and the identity of its managers and of the persons foreseen to take over the functions of the managers of the national electronic money institution, insofar as the entity submitting the notification plans to change in the respect:
  • specified in Article 61(1)(9)(b) and (c) of the UUP concerning the entity submitting the notification and the persons referred to in point 1;
  • identifying the EMI;
  • concerning the professional, business or statutory activities of the notifying entity and the persons referred to in point 1, and in particular the subject matter of such activities, the scope and location of such activities and their history, as well as the educational background held by the notifying entity, which is a natural person, and the persons referred to in point 1;
  • concerning the group to which the notifying entity belongs, and in particular its structure, the entities belonging to it and the legal and factual capital, financial and personal links with other entities;
  • concerning the economic and financial situation of the entity submitting the notification;
  • concerning actions to acquire or take up a number of shares ensuring that the levels set out in Article 132c(1) are reached or exceeded, or to become a parent undertaking of a national electronic money institution, in particular the target proportion of the total voting rights in the constituent body of the national electronic money institution, the related entitlements, the manner and sources of financing of the acquisition or taking up of the shares, the contracts concluded in connection therewith and actions in concert with other entities;
  • on the notifying entity’s intentions with regard to the future business of the domestic electronic money institution, in particular with regard to marketing, operational, financial and organisational and governance plans;
  • concerning the notifying entity’s obligations, if any, with regard to the prudent and sound management of the domestic electronic money institution.

Information on qualifications and professional experience, as well as the information referred to in Article 61(1)(9)(b) and (c), shall not be required with respect to the notifying entity and its managers if the notifying entity is a domestic bank, credit institution, payment institution, electronic money institution, insurance undertaking, reinsurance undertaking, brokerage house, investment firm or management company authorised in a Member State, provided that this circumstance is demonstrated in the notification.

The detailed documents to be attached to the notification are indicated in the Regulation of the Minister of Finance on the documents to be attached to notifications on the intention to acquire or take up shares in a domestic electronic money institution of 6 March 2014, issued pursuant to Article 132d(3) of the UUP. (Journal of Laws of 2014, item 386).

8.2 Opposition of the KNF

Pursuant to Article 132e(1) of the UUP, the KNF shall object, by way of a decision, to the acquisition or subscription of shares in a domestic electronic money institution indicated in the notification if:

  • the notifier has not remedied deficiencies in the notification or in the documents and information accompanying the notification within the prescribed period,
  • the entity submitting the notification has not provided additional information or documents requested by the KNF within the deadline,
  • it is justified by the need for prudent and stable management of the KIPE, because of the possible adverse impact of the notifying entity on the institution or because of an assessment of the financial situation of the notifying entity
  • the provisions of Article 25h(2) and (4) to (6) and Articles 25i to 25k of the Banking Law shall apply mutatis mutandis.

When making the assessment referred to in point 3 above, the FSA shall also take into account the commitments made by the entity submitting the notification, as referred to in Article 132d(1)(9) of the UUP.

In the case of the acquisition or subscription of shares::

  • in breach of Article 132c(1) of the UUP, or
  • in spite of an objection by the KNF, or
  • before the expiry of the time limit entitling the KNF to raise the objection referred to in sub-paragraph 1, or
  • after the deadline set by the KNF, as referred to in Article 25h(5) of the Banking Law, for the acquisition of shares within the scope of Article 132c(1)
  • voting rights may not be exercised in respect of those shares. In these cases, the right to bring an action for the annulment of a resolution of the constituent body of a national e-money institution is also vested in the KNF.

In these cases, the KNF may, by decision, order the divestment of shares in the domestic electronic money institution within a specified period.

Importantly, if the acquisition of shares results in a relationship: the acquirer as a parent entity and the EMI as a subsidiary the EMI’s managers appointed by the parent entity or who are members of the board of directors, proxies or officers of the parent entity may not take part in acts of representation of the domestic electronic money institution; where it cannot be established which managers have been appointed by the parent entity, the appointment of the body responsible for the management of the domestic electronic money institution shall be ineffective from the date on which the parent entity of the domestic electronic money institution becomes a parent entity.

In such a case, the KNF may also, by way of a decision, order the disposal of the shares or stakes in the domestic electronic money institution within a prescribed period. If the shares or stocks are not disposed of within the time limit set by the KNF, the KNF may impose a fine of up to PLN 1,000,000 on the shareholder or stockholder of the domestic electronic money institution or revoke the authorisation of the EMI.

Resolutions passed in breach of this rule shall be invalid unless they meet the requirements of a quorum and a majority of votes cast without taking into account invalid votes.

The KNF may, in particularly justified cases, by decision, issued at the request of a shareholder, shareholder or parent entity of a domestic electronic money institution, waive the prohibitions on the exercise of the voting rights of the shares or the representation of the EMI by persons appointed by the parent entity (if the interests of the electronic money users so require and the applicant demonstrates that there is no indication of an adverse effect of the acquiring entity on the EMI or due to an assessment of the financial situation of the acquirer.

9. FAQ

Is Electronic Money Institution allowed to provide payment services?

Yes. As a provider within the meaning of Article 4 of the UUP, EMI may provide all the payment services listed in the Act.

Is Electronic Money Institution allowed to exchange currency?

Yes. Pursuant to Article 132j(1)(1)(a) of the UUP, EMI may provide ancillary services closely related to the issuance of electronic money and the provision of payment services, including currency exchange services

Is Electronic Money institution allowed to provide crypto currency services (storage, trade)?

Yes. Article 129n (2) of the Act on Combating Money Laundering and the Financing of Terrorism provides that the activity of virtual currencies may be carried out by a legal person or an organisational unit without legal personality, in which the partners entrusted with the conduct of the affairs of the company, or authorised to represent the company, or members of the management bodies have not been validly convicted of an intentional offence against the activities of state institutions and local self-government, against the administration of justice, against the credibility of documents, against property, against economic turnover and property interests in civil law transactions, against trading in money and securities, an offence referred to in Art. 165a of the Act of 6 June 1997 – Criminal Code, an offence committed for financial or personal gain or an intentional fiscal offence. Registration in the register of activity in the field of virtual currencies kept by the minister responsible for public finances is required.

How long does it take to obtain the Electronic Money institution license?

The KNF shall issue its decision on the authorisation within 3 months from the date of receipt of the application or its supplementation (Art. 132b(2) in conjunction with Art. 62(2) of the UUP). In practice, due to the high requirements imposed by the KNF resulting in extensive calls for supplementation of missing information and documents, the proceedings usually last no less than one year. It should be noted, however, that only one EMI has been registered in Poland to date, which makes it necessary to treat such predictions with considerable caution. It does not appear, however, that such proceedings are expected to last significantly less than the authorisation proceedings of domestic payment institutions.

Can a foreigner / non-Polish resident be a director in Electronic Money institution?

Yes. A member of the governing body of EMI may include a member of the body who is a foreigner or who resides outside the territory of Poland. However, it should be borne in mind that such members may not constitute more than half of the body. The remaining half should, in accordance with the Principles of Corporate Governance for Supervised Institutions, be made up of persons who speak Polish and have the appropriate experience and knowledge of the Polish financial market necessary to manage a supervised institution in the territory of Poland.

What is the fee for obtaining the Electronic Money institution license?

Pursuant to Article 132zf UUP, a fee is payable for the issuance and amendment of the authorisation referred to in Article 132a(1) UUP, with the exception of the case in which the amendment of the authorisation consists only in limiting the type of payment services that EMI is authorised to provide, and making an entry in the register, excluding the entry related to the issuance or amendment of the authorisation.

These fees are used to cover the costs of supervision.

The amount of the fee may not exceed the equivalent in Polish currency of EUR 1,500, determined using the average exchange rate announced by the National Bank of Poland (NBP) in force on the day the permit is issued or amended or the entry is made in the register.

In addition, EMIs shall be obliged to make contributions to cover supervisory costs. The contributions shall be made in an amount equal to the arithmetic average, to be determined on 1 January of the relevant year, of the sum of the financial liabilities in respect of electronic money issued, calculated at the end of each calendar day over the preceding twelve calendar months, multiplied by a rate not exceeding 0.075%. Liabilities of EMI arising from the performance of activities exempted by Article 6, whether or not the exemption depends on the provision of other services, shall not be taken into account in the calculation of the average.

EMIs providing payment services shall, irrespective of the contributions to supervisory costs referred to in paragraph 1, are be obliged to make contributions to supervisory costs under the terms of Article 113 UUP. The provisions issued on the basis of Article 115 UUP concerning contributions made by KIP shall apply mutatis mutandis.

The sum of the fees paid by EMI in a given year for the issuance, modification of an authorisation or entry in the register reduces the total amount of contributions to the supervision costs.

The deadlines for payment, the amount and method of calculating payments, the method and deadlines for settlement of payments are set out in the Regulation of the Prime Minister on payments to cover the costs of supervision of electronic money institutions, within the scope of activities related to the issuance of electronic money, and fees for certain activities of the Financial Supervision Commission of 23 April 2020. (Journal of Laws of 2020, item 770).

Expert team leader DKP Legal Piotr Putyra
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Expert team leader DKP Legal Piotr Glapiński
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Write an inquiry: [email protected]
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