Why Registration Is Required for Payment Services
The Georgian law on payment systems and payment services states categorically that it is impermissible for payment services to be carried out by a person that is not a payment service provider registered by the National Bank of Georgia, a commercial bank, a microbank or a microfinance organisation, or a person acting within the framework of a separate exception provided by the law. This means that before launching a payment business you must determine the legal classification of your services and only then decide whether they require registration. Rendering payment services without registration is a violation of the law and may entail both administrative and criminal consequences, which is why the legal analysis of the business model is the first step for any payment project — boundary lines between technical support and genuine payment services are exactly where disputes with the regulator begin.
The Registration Procedure and the List of Providers
The registration of a payment service provider, and the cancellation of that registration, are carried out by the National Bank of Georgia under a procedure established by the bank itself. Upon registration the provider is granted the right to carry out a specific payment service or services — registration is not a general permission but covers a precisely defined circle of services. The National Bank publishes the list of registered providers together with the payment services each provider is permitted to render, and significant providers are indicated separately. For consumers and partners this list is a reliable source of public information: a company entered in the list genuinely holds the defined authorisation, while obtaining payment services from a person absent from the list carries risk.
Capital Requirements and the Acquisition of a Significant Share
The capital of a payment service provider must at no stage of its activity be less than the amount of supervisory capital determined and calculated under the procedure set by the National Bank. A separate rule concerns the acquisition of a significant share: a person planning to acquire a significant share in a provider must submit to the National Bank an application together with the information and documentation determined by a legal act of the bank. The bank takes its decision within 1 month from the submission, and the absence of a reply within that period automatically means consent to the transaction. If the information submitted is insufficient or inaccurate, the bank is entitled to request additional information directly from the potential acquirer or from the provider, and the running of the time limit is suspended until the additional materials are submitted.
Receipt and Publication of Information
For the purposes of supervision, the National Bank is entitled to request and receive from a provider financial, statistical and any other information within the limits of its competence. The bank also determines the information that the provider must publish in connection with a payment account or payment services, including the commissions charged and the exchange rates applied. In order to ensure the transparency of commissions and their comparability, the bank publishes this information with an indication of the provider's name — an important instrument of price competition on the market. For the purposes of the legislation on the prevention of money laundering and the financing of terrorism, the provider also submits a corresponding report to the National Bank, whose form, quality and submission deadline are determined by a legal act of the bank.
The Status of a Significant Provider and Its Consequences
The National Bank is entitled to impose additional requirements on a provider where the volume of electronic money issued by that provider or by a connected person, or the turnover of its other payment services, exceeds the thresholds set by the bank; the same requirements may be extended to a provider the bank considers significant for the financial sector. A significant provider must maintain the minimum amount of capital, by its types, at every stage of its activity, and where it is at the same time a microfinance organisation it must observe the greatest of the amounts established under this law and under the law on microfinance organisations. The requirements continue to operate even after the volume falls back below the thresholds, and the bank may release the provider from them only where the volume or turnover has not exceeded the thresholds for 3 consecutive months, or where the requirements were imposed on the basis of significance. A significant provider keeps its reporting under IFRS and publishes on its own website the audited annual financial reporting for the previous year by 15 May of the following year, the audit having been carried out under the international standards of auditing.
Frequently Asked Questions on Becoming a Provider
Who carries out the registration and what does it grant?
Registration, and its cancellation, are carried out by the National Bank of Georgia. Upon registration the provider is granted the right to render a specific service or services, and this is reflected in the list published by the bank.
What happens when a significant share is acquired?
The acquirer must apply to the National Bank in advance with an application and documentation. The decision is taken within 1 month from the submission, and the absence of a reply means consent. Where the information is insufficient, the bank requests additional materials and the time limit is suspended.
How can I verify a provider's registration?
The National Bank publishes the list of payment service providers with an indication of the services permitted for each provider. The list is public, and significant providers are mentioned in it separately.
How We Help on Legal.ge
The Legal.ge team will support you through the entire process of registration as a payment service provider: we will assess the classification of your business model, prepare the application and the documentation, explain the requirements on capital and the submission of information, and advise you on the acquisition of a significant share.