The Legal Framework of Payment Service Providers in Georgia
The activity of payment system operators and payment service providers in Georgia is built on the norms of the Organic Law of Georgia on the National Bank. The central provision of this field — Article 48² of the law — provides that the National Bank exercises supervision over these entities in accordance with Georgian legislation: through registration, deregistration, inspection, the setting of additional requirements, the determination of initial and ongoing capital, the imposition of restrictions and the application of sanctions. Each element of that list is a practical challenge for a provider: registration is the gateway to the market, the capital requirements are a permanent operational burden, and inspections and sanctions are the risks that a compliance system must manage. Understanding how these instruments interact is the starting point of any PSP legal strategy in Georgia.
Registration, Capital and Sanctions
Under the second part of Article 48², the rules on registration and its cancellation, and the sanctions applicable to operators and providers — including the amount of monetary fines and the procedure for their imposition — are determined by normative acts of the National Bank, and the amounts of monetary fines are directed into the state budget of Georgia. The same article empowers the National Bank to determine the issues of granting and revoking the status of a significant system and of a significant payment service provider: it may grant a payment system the status of a systemically important or exceptionally important payment system and define the corresponding criteria and requirements towards capital and assets. The fitness of management stands separately: the National Bank is authorized to determine, by a legal act, the fitness criteria for administrators of a payment service provider and of a payment system operator. This means that the quality of the provider's governance and the reputation of its management are themselves part of the regulatory requirement — not merely a matter of internal policy. A separate component concerns international tax compliance: the National Bank is authorized to verify, in the procedure it establishes, how a payment service provider fulfils the requirements defined by the agreement between the Governments of Georgia and the United States on improving the performance of international tax obligations and foreign account tax compliance.