Digital Wallets in the Georgian Legal Framework
A digital wallet is a form of electronic money and payment services whose operation in Georgia is governed by the Law of Georgia on Payment Systems and Payment Services. The law determines who may provide payment services, how a provider is registered and supervised, what information must be submitted and published, and — most importantly for users — how the consumer funds held in a wallet must be protected. Building compliance properly means converting these statutory requirements into a single, continuously operating framework in which every process, from registration to the protection of client accounts, is documented and auditable.
Under the law, payment services may not be provided by a person that is not a payment service provider registered with the National Bank of Georgia, a commercial bank, a microbank or a microfinance organization, or another person specifically provided for by the law. Registration, and its cancellation, are carried out by the National Bank of Georgia under a procedure it establishes. Upon registration the provider is granted the right to provide a particular payment service or services, which means that a wallet operator may not offer services beyond the scope of its authorization. The National Bank publishes a list of providers indicating the services each is permitted to provide, and significant providers are shown separately in that list.
Registration, Capital and the Acquisition of a Significant Share
A payment service provider’s capital must at no stage of its activity be less than the amount of calculated supervisory capital determined and computed under a procedure established by the National Bank. This requirement is permanent in nature: capital monitoring and repeated compliance checks should be separated out as a distinct, hands-on process within the compliance programme, with clear responsibility and a documented escalation route.
The acquisition of a significant share in a provider follows special rules. A person planning to acquire a significant share must submit an application to the National Bank together with the information and documentation defined by the Bank’s legal act. The Bank decides the matter within 1 month of the submission of the information, and failure to respond within that period automatically means consent to the transaction. If the information submitted is insufficient or inaccurate, the Bank may request additional information or documentation directly from the prospective acquirer or from the provider itself — in that case the one-month clock is suspended until the additional information is submitted.
Information Submission, Publication and Reporting
The National Bank is authorized to request and receive from a provider financial, statistical and any other information within the scope of its competence, under a procedure it establishes. For an operator this means a stable process for preparing and promptly submitting data, because a request may touch upon any matter connected with a payment account or payment services.
The provider itself also has publication duties: under a procedure determined by the National Bank, information connected with payment accounts or services is published, including the commissions charged and the exchange rates applied. For transparency and comparability, the National Bank publishes this information indicating the provider’s name, which allows consumers to compare the conditions of different operators. In addition, for the purposes of the legislation on the prevention of money laundering and the financing of terrorism, the provider submits the corresponding reports to the National Bank; the form, quality and submission deadline of the reporting are determined by the Bank’s legal act.
Significant Provider Status and Audited Reporting
The law separately defines the status of a significant payment service provider. Where the volume of electronic money issued by a provider or a person connected with it, or the turnover of its other payment services, exceeds the thresholds set by the National Bank, the Bank may impose additional requirements on it. The same is possible by an individual administrative-legal act where the Bank considers the provider significant for the financial sector — even when the volume or turnover does not exceed the established thresholds.
A significant provider must maintain, at every stage of its activity, the minimum amount of calculated capital broken down by its types; if it is at the same time a microfinance organization, it must maintain the greater of the capital amounts established under this law and under the law on microfinance organizations. The additional requirements continue to apply even after the volume or turnover falls below the thresholds. Release is possible where the volume of electronic money or the turnover no longer exceeds the established thresholds for 3 consecutive months, or where the requirements were imposed on the basis of the provider’s significance for the sector.
The reporting requirements are equally strict: the provider keeps its accounting and financial reporting in accordance with International Financial Reporting Standards (IFRS). A significant provider must publish on its own website the audited annual financial statements of the past year within the period ending on 15 May of the following year, prepared under international financial reporting standards and audited in accordance with international auditing standards. A delay in publishing audited statements is itself a compliance defect and should be treated in the oversight process as a risk event.
Protection of Consumer Funds
For the user of a digital wallet, the most important safeguards are the rules protecting consumer funds. Consumer funds held with a provider must be placed separately from the provider’s own funds, in a nominal ownership account or accounts. Using those funds to secure the provider’s obligations is impermissible, including for granting credit or an overdraft. The consumer funds received are not a deposit, no interest accrues on them for the benefit of the consumer, and electronic money constitutes the electronic money provider’s obligation towards the consumer.
Upon the consumer’s request, the provider must convert the electronic money into cash funds. A legal entity, an individual entrepreneur registered under Georgian legislation and an organizational entity without legal-person status may participate in the electronic money scheme only as the payee of a payment operation, and only in the exceptional cases provided by law may they act as payer. The provider must ensure the transfer of funds equivalent to the electronic money received by such persons to their bank accounts no later than 15 banking days after receipt.
Where the provider includes a legal entity in the electronic money scheme as a payer, it must ensure the performance of the obligations provided for by Georgian legislation, including the Tax Code, and notify the National Bank about it within 2 business days. The list of such providers is published on the official website of the National Bank, which is an additional public source of information for investors and partners.
Frequently Asked Questions
Who may provide digital wallet services in Georgia?
Only a payment service provider registered with the National Bank of Georgia, a commercial bank, a microbank or a microfinance organization, or another person specifically provided for by law. Providing payment services without registration is prohibited, and registration grants the right to provide only the particular service or services indicated.
Within what period does the National Bank decide on the acquisition of a significant share?
The decision is made within 1 month of the submission of the information. No response within that period automatically means consent to the transaction. If the Bank requests additional information, the clock is suspended until it is submitted.
What obligations does a significant provider bear?
It must maintain the minimum calculated capital at every stage, keep accounting under IFRS, and publish the audited financial statements for each year on its website by 15 May of the following year. The additional requirements continue to apply even after turnover falls below the thresholds.
How is the money a consumer holds in a wallet protected?
Consumer funds are kept separately from the provider’s own funds, in a nominal ownership account. Using them to secure the provider’s obligations or to grant credit or an overdraft is prohibited. These funds are not a deposit, and upon the consumer’s request electronic money must be converted into cash funds.
What happens if the operator includes a legal entity in the scheme as a payer?
The provider must ensure compliance with the obligations established by legislation, including the Tax Code, and notify the National Bank within 2 business days. The list of such providers is published on the Bank’s website.
How We Help on Legal.ge
On Legal.ge you can find banking and finance lawyers who will help you assemble the full digital wallet compliance package: from preparing the registration application and computing capital requirements, to documenting the procedures for publishing information, reporting, and protecting consumer funds. Choose a specialist by profile, discuss your situation, and receive a precise, law-based action plan.