Fintech Department Report | Regulation of new payment functions
New registration requirements are created.
Through Communication “A” 7462, the BCRA began to introduce important reforms in the legal regime of electronic payments, in order to reinforce the regulation on certain roles within the payment system and also continue increasing interoperability.
New regime for “Digital Wallets”
Although the BCRA had already issued in the past some regulations aimed at “digital wallet” operators (such as Communications “A” 7328 and 7363), it was a figure that lacked a precise definition and there were doubts about its distinction from the so-called “Payment Service Providers that Offer Payment Accounts” (PSPCP), which were the PSPs that until now had specific regulations for their activity.
Through Communication “A” 7462, issued at the end of February, the BCRA established a new specific regime for “digital wallets”, defined as the “service offered by a financial institution or payment service provider (PSP) through of an application on a mobile device or in a web browser that must allow –among other transactions– to make payments by instant transfers (PCT) and/or with other payment instruments –such as debit, credit, purchase or prepaid cards” .
With this new definition, the BCRA intended to capture within the payment regulation not only the PSPCPs, but also the applications (including bank ones) that aggregate accounts or cards and that do not necessarily issue their own accounts or cards, such as MODO or Ank, that until now were not covered by the figure of PSPCP.
As a result, there is now the generic global figure of “digital wallet”, within which are included the applications of financial institutions and PSPCP that offer their own accounts or cards (with or without linking with third-party accounts and cards) and those of PSPs that only aggregate payment accounts or third-party cards.
The role of the “Initiator” of payments
Along with the figure of “digital wallet”, the BCRA also defined for the first time the role of the “Initiators” of payments (PSI), as a new regulated function. This is the service that consists of “sending a valid payment instruction at the request of an ordering client to the provider of a banking account or payment account, or to the issuer of a payment instrument”.
The BCRA’s intention with this new definition was precisely to reach PSPs that allow payment instructions to be sent to accounts or cards, whether or not they operate with their own accounts or cards.
Other new regulated figures
Under the same Communication, the BCRA also included within the regulation of PSPs two new regulated figures: (i) the Automatic Teller Machine Networks (RCA) and (ii) the Electronic Funds Transfer Networks (RTEF) (aimed at those who act as processors or operators within the electronic transfer system, transmitting payment instructions between financial institutions and PSPs so that the transfers reach their destination).
New registration obligations
With this new Communication, new registration obligations with the BCRA also arise. On the one hand, the old registry that only considered the role of PSPCPs has now become a generic Registry for PSPs, where not only PSPCPs must register, but also PSIs, and RCAs and RTEFs.
It should be clarified that while the BCRA now expressly requires that the corporate purpose of companies wishing to register as PSPs must explicitly contemplate the development of activities related to the provision of payment services that motivate the registration, it still does not require an exclusive purpose, so PSPs can continue to fulfill several functions at the same time. However, in the case of PSPCPs acting as Initiators, they only need to register as PSPCPs.
Initially, there were some doubts regarding the registration obligation of PSIs, because the definition of “Initiator” is so generic that it could even reach terminal providers or payment gateways, even if they did not offer any type of Internet application. However, through subsequent Communication “A” 7495, the BCRA clarified that only those “Initiators” that offer the “digital wallet” service should register as PSIs.
On the other hand, the BCRA also created the Registry of Interoperable Digital Wallets, in which financial institutions and PSPCPs or PSIs that offer the “digital wallet” service must register, when, among their functionalities, they grant the possibility of making instant payments by reading QR codes.
To enroll in this new Registry, financial entities, PSPCPs or PSIs must obtain a certification from each administrator of immediate transfer schemes (currently Coelsa, Prisma, and Red Link) stating that the service offered allows the reading of QR codes generated by each and every one of the acquirers of said schemes.
For registration in the new Registry of Interoperable Digital Wallets, the BCRA established a deadline of April 15, 2022, for financial entities, PSPCP, and PSI that were already offering the service. In addition, it was granted until May 1st, 2022, for the administrators of immediate transfer schemes to offer a formal procedure for those new operators who wanted to integrate their wallets into the available QR code schemes.
On the other hand, the BCRA established that those PSPCP or PSI that were already registered, or that were processing their registration, or that must process their registration as such, would have 90 days from a date to be determined by the BCRA to readjust the Operational and Commercial Description originally provided at the time of registration, or to request a new registration, as the case may be. Through Communication “B” 12333, the BCRA announced that the date to start counting said term would be May 27, 2022.