Authorisation for setting-up: electronic money institution
The setting-up of electronic money institutions depends on authorisation to be granted by the Banco de Portugal on a case-by-case basis, under Article 18(1) of the Legal Framework for Payment Services and Electronic Money (Regime Jurídico dos Serviços de Pagamento e da Moeda Eletrónica – RJSPME), published by Decree-Law No 91/2018 of 12 November 2018.
Inclusion of payment services or extension of the range of payment services, among those listed in Article 4 of the RJSPME, in the corporate purpose of electronic money institutions already established is also subject to prior authorisation to be granted by the Banco de Portugal, in accordance with Article 25(1) of the RJSPME. Such intention to include payment services or extend their range must be materialised by means of a request for changes to the corporate purpose in the articles of association, in accordance with Article 25(1)(b) of the RJSPME.
What is an electronic money institution?
Under Article 14(1) of the RJSPME, an electronic money institution is a legal person whose main activity is to issue electronic money.
Under Article 2(ff) of the RJSPME, ‘electronic money’ means electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of banknotes, coins and scriptural money for the purpose of making payment transactions within the meaning of Article 2(ii) of the RJSPME, and which is accepted by a natural or legal person other than the electronic money issuer.
In addition to the issuance of electronic money, an electronic money institution may provide one or more payment services listed under Article 4 of the RJSPME, in accordance with Article 14(2) of the RJSPME.
In line with the principle of exclusivity, the issuance of electronic money and the payment services may only be professionally provided by the entities listed under Article 12(1) and Article 11(1) and (2) of the RJSPME respectively.
Under Article 4 of the RJSPME, the following activities are payment services:
- services enabling cash to be placed on a payment account as well as all the operations required for operating a payment account;
- services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account;
- execution of payment transactions, including transfers of funds on a payment account with the user’s payment service provider or with another payment service provider, such as:
- execution of direct debits, including one-off direct debits;
- execution of payment transactions through a payment card or a similar device;
- execution of credit transfers, including standing orders;
- execution of payment transactions where the funds are covered by a credit line for a payment service user, such as:
- execution of direct debits, including one-off direct debits;
- execution of payment transactions through a payment card or a similar device;
- execution of credit transfers, including standing orders;
- issuing of payment instruments or acquiring of payment transactions;
- money remittance;
- payment initiation services (i.e. services enabling initiation of online payment transactions on behalf of the payer immediately with the payee, without the payer having to interact with their payment service provider (usually a bank));
- account information services (i.e. services enabling users to consolidate in a single app or website information on their payment accounts held with one or more payment service providers (usually banks), provided that such accounts are accessible online).
In addition to the issuance of electronic money and the provision of payment services, and as provided for in Article 14(2) of the RJSPME, electronic money institutions may carry out the following activities, provided that they are included in their corporate purpose:
- credit granting relating to the payment services referred to in Article 4(d) and (e) of the RJSPME, in accordance with the conditions laid down in Article 15 of the same Legal Framework;
- The provision of operational and ancillary services closely related to the issuance of electronic money and payment services, such as ensuring the execution of payment transactions, foreign exchange services, safekeeping activities, and the storage and processing of data;
- the operation of payment systems, without prejudice to Article 68 of the RJSPME;
- Business activities other than the issuance of electronic money, in accordance with the legal provisions applicable to such activities. Authorisation to carry out these activities is dependent on compliance with Article 21(1) of the RJSPME, applicable by reference under Article 21(2), i.e. those activities other than the issuance of electronic money may not impair (i) the financial soundness of the payment institution or (ii) the proper performance of the supervisory tasks by the Banco de Portugal.
Article 5(1) of the RJSPME provides for a series of operations falling outside the scope of that Legal Framework and, as such, they are not subject to the authorisation regime applicable to the setting-up of payment institutions or electronic money institutions.
Nevertheless, under such exclusions, the following reporting obligations to the Banco de Portugal are applicable:
- Services excluded under Article 5(1)(k)(i) and (ii) of the RJSPME (“limited network” or “very limited range”) – where the total value of payment transactions executed over the preceding 12 months exceeds the amount of €1 million, a notification must be sent to the Banco de Portugal containing a description of the services offered, specifying under which exclusion referred to Article 5(1)(k)(i) and (ii) the activity is considered to be carried out (in accordance with Article 6(1) of the RJSPME);
On the basis of that notification, the Banco de Portugal takes a duly motivated decision on the basis of criteria referred to in Article 5(1)(k) of the RJSPME where the activities do not qualify as a limited network, and inform the service provider accordingly. - Services provided for in Article 5(1)(l) of the RJSPME – service providers pursuing activities to which this exclusion refers must: (i) send a notification to the Banco de Portugal containing a description of the services offered and (ii) provide an annual audit opinion, under Article 6(3) of the RJSPME, testifying that the activity complies with the limits set out in Article 5(1)(l) of the RJSPME.
Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 (“PSD2”) | Directive on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC. |
Regulation (EU) 575/2013 of the European Parliament and of the Council of 26 June 2013 (“CRR”) | Regulation on prudential requirements for credit institutions and investment firms and laying down the capital requirements applicable to payment institutions and electronic money institutions. |
Guidelines of the European Banking Authority (EBA) on information to be provided for the authorisation of payment institutions and e-money institutions and for the registration of account information service providers, under Article 5(5) of PSD2 (EBA/GL/2017/09) | These set out the information to be provided in the application for the authorisation of payment institutions, in the application for registration of account information service providers and in the authorisation applications of electronic money institutions. |
EBA Guidelines on the criteria on how to stipulate the minimum monetary amount of the professional indemnity insurance or other comparable guarantee under Article 5(4) of PSD2 (EBA/GL/2017/08) | These specify criteria and indicators on how to stipulate the minimum monetary amount of the professional indemnity insurance or other comparable guarantee to be held by undertakings, whenever holding such insurance is mandatory (e.g. providing account information services and/or payment initiation services). |
Commission Delegated Regulation (EU) 2018/389 of 27 November 2017 | It complements PSD2 with regard to regulatory technical standards for strong customer authentication and common and secure open standards of communication. |
These specify the conditions, laid down in Article 33(6) of Commission Delegated Regulation (EU) 2018/389, exempting payment service providers, which manage accounts that opted for a dedicated interface, from establishing the contingency mechanism under Article 33(4) of that Regulation. | |
Commission Delegated Regulation (EU) 2020/1423 of 14 March 2019 | These specify the criteria for determining when the appointment of a central contact point in a host Member State is appropriate and the functions that these contact points should have. |
EBA Guidelines on major incident reporting under Directive (EU) 2015/2366 (PSD2) (EBA/GL/2017/10) | These specify the criteria for the classification of major operational or security incidents by payment service providers as well as the format and procedures they should follow to communicate such incidents to the competent authority in the home Member State. |
EBA Guidelines on procedures for complaints of alleged infringements of PSD2 (EBA/GL/2017/13) | These lay down the procedures for managing complaints from payment service users under PSD2. |
EBA Guidelines on ICT and security risk management (EBA/GL/2019/04) | These specify the risk management measures that financial institutions must take in accordance with Article 74 of Directive 2013/36/EU to manage their ICT and security risks for all activities and that payment service providers must take, in accordance with Article 95(1) of PSD2, to manage the operational and security risks relating to the payment services they provide. |
EBA Guidelines on reporting requirements for fraud data under Article 96(6) PSD2 (EBA/GL/2018/05) | These specify statistical data on fraud related to different means of payment that payment service providers have to report to their competent authorities. |
These specify the internal governance arrangements that institutions should implement when they outsource functions, in particular with regard to the outsourcing of critical or important functions. |
Legal Framework for Payment Services and Electronic Money("RJSPME") | It governs the taking up of the business of electronic money institutions and the provision of payment services, as well as the taking up of the business of electronic money institutions and the provision of electronic money issuance services. | ||
Legal Framework of Credit Institutions and Financial Companies ("RGICSF") | It regulates access to and pursuit of activity by credit institutions, financial companies and investment firms, and the exercise of their supervision. | ||
It lays down the criteria on how to stipulate the minimum monetary amount and all other minimum requirements of the professional indemnity insurance. | |||
It determines which information should accompany communications of acquisition of or increase in qualifying holdings in institutions subject to the supervision of the Banco de Portugal. | |||
It determines which elements the institutions must submit together with the authorisation request for the exercise of functions of the members of the management and supervisory bodies. | |||
Notice of the Banco de Portugal No 3/2020 and Instruction of the Banco de Portugal No 18/2020 | It regulates the internal control and governance systems and sets the minimum standards upon which the organisational culture of the entities must be based. | ||
It sets forth anti-money laundering and counter terrorist financing measures. | |||
Instruction of the Banco de Portugal No 5/2019 of 30 January 2019 | It sets forth the requirements for entities subject to the Bank's supervision to regularly report information to the Banco de Portugal in the field of prevention of money laundering and terrorist financing (ML/TF). |
| |
It governs conditions of application, procedures, instruments, mechanisms, enforcement measures, reporting obligations and other aspects necessary for ensuring compliance with obligations for the prevention of money laundering and terrorist financing, within the activities of financial entities subject to the Banco de Portugal’s supervision. | |||
Notice of the Banco de Portugal No 8/2016 of 30 September 2016 | It lays down the obligations to record and report to the Banco de Portugal transactions corresponding to payment services and which have as beneficiaries natural or legal persons established in off-shore law. | ||
Instruction of the Banco de Portugal No 5/2020 of 17 February 2020 | It regulates the reporting of information on payment systems, instruments, transactions and services, and money remittance. | ||
· Instruction of the Banco de Portugal No 1/2019 of 15 January 2019 | It governs the obligation to report to the Banco de Portugal major operational or security incidents related to the provision of payment services, in compliance with Article 71 of the RJSPME. | ||
Instruction of the Banco de Portugal No 4/2021 of 15 March 2021 | It regulates the management and reporting of operational and security risks by payment service providers, in compliance with Article 70 of the RJSPME. | ||
Requirements for setting-up an electronic money institution
Upon an application for authorisation to set up an electronic money institution, the Banco de Portugal checks whether the submitted proposal meets the requirements imposed by law.
These requirements are listed in Article 18(2) of the RJSPME, under which electronic money institutions having their head office in Portugal must:
- take the form of a public limited company (sociedade anónima) or limited liability company (sociedade por quotas);
- have a share capital not lower than the legal minimum corresponding to the services to be provided, in accordance with Article 55 of the RJSPME (€350,000);
- have the principal and effective headquarters of the administration in Portugal and carry out at least part of their principal activity in Portugal;
- have management and supervisory bodies composed of members whose reputation and professional qualification, at an individual level or at the level of the bodies as a whole, provide guarantees of sound and prudent management of the institution;
- demonstrate that the natural or legal persons who wish, directly or indirectly, to hold a qualifying holding meet conditions to ensure sound and prudent management of the institution;
- have robust governance arrangements in place, including a clear organisational structure with well defined, transparent and consistent lines of responsibility;
- have effective processes in place to identify, manage, monitor and report the risks the institution is or might be exposed to;
- have adequate internal control mechanisms, including sound administrative and accounting procedures, that are comprehensive and proportionate to the nature, scale and complexity of the activities to be carried out;
- have adequate internal control mechanisms to comply with the laws and regulations preventing money laundering and terrorist financing.
Authorisation
1. Submission and supporting information of the application
The application for authorising the setting-up of an electronic money institution must be submitted to the Banco de Portugal, identifying all the activities and, where applicable, the payment services to which authorisation is sought and, in general, include the following elements:
- elements listed in Article 19 of the RJSPME;
- complementary elements.
The application for authorisation, including all supporting information above, may be submitted in electronic or physical format.
- Electronic format: dsp.registos.expediente@bportugal.pt
- Physical format:
Banco de Portugal, Prudential Supervision Department, Authorisations Unit
R. Francisco Ribeiro, 2
1150-165 Lisbon
2. Assessment of the application
The Banco de Portugal checks the completeness of the received information for the analysis of the application procedure, assesses the information submitted and may request the applicant to provide any clarifications and additional elements which it considers appropriate to render a decision.
If the Banco de Portugal considers that the application does not contain all necessary information and elements nor meet all domestic legal and regulatory authorisation requirements and conditions, the Banco de Portugal notifies the applicants and allow them reasonable time to render their opinion and, if applicable, remedy any identified inadequacy, before refusing to grant authorisation.
3. Decision
The Banco de Portugal may take one of the following decisions:
- Granting of authorisation
The Banco de Portugal grants authorisation for the setting-up of the institution if the applicant meets the authorisation conditions in accordance with the applicable national law. - Refusal of authorisation
The Banco de Portugal refuses to grant authorisation where the application does not meet all authorisation conditions laid down in the applicable national legislation, notably in the situations under Article 20(1) of the RGICSF, applicable to electronic money institutions mutatis mutandis under Article 23(3) of the RJSPME.
If the applicant intends to pursue activities other than the issuance of electronic money and the payment services, the Banco de Portugal, under Article 21(1) and (2) of the RJSPME, may determine, as a condition for granting authorisation, the setting-up of a separate commercial company whose sole purpose is to issue electronic money and, where applicable, to provide payment services. This ensures the separation of the issuance of electronic money and of the payment services from activities other than these services where such activities carried out or to be carried out by the applicant institutions impair or are likely to impair:
- the financial soundness of the electronic money institution;
- the proper performance of the supervisory tasks by the Banco de Portugal.
The Banco de Portugal notifies the applicant of its decision within three months of the receipt of a complete application or of the additional information required, but in any case within twelve months from the receipt of the initial application.
The granting of authorisation by the Banco de Portugal enables the applicant to set up the electronic money institution, which is required to commence activity within twelve months of the Banco de Portugal’s decision. The authorisation lapses after this period. Nevertheless, the Banco de Portugal may, upon request of the applicants and one time only, extend this time limit for the commencement of activity for another period of twelve months, under Article 21(2) of the RGICSF, applicable by reference under Article 26 of the RJSPME.
In order for the institution to begin its activity, it must be registered in a special register with the Banco de Portugal and such registration should therefore be requested by the applicant to the Banco de Portugal.
Special registration with the Banco de Portugal
4. Prior and on-site verification of compliance with the legal and operational requirements for the commencement of activity
After the setting-up of the electronic money institution is authorised by the Banco de Portugal, and after the company is effectively set up, the parties concerned must request the Banco de Portugal to proceed with the institution’s special registration for the purposes of Article 65(1) of the RGICSF, applicable by reference under Article 34(2) of the RJSPME.
Upon such request, the Banco de Portugal carries out a prior inspection at the electronic money institution’s premises, in order to check whether all conditions for authorisation necessary for the setting-up of the electronic money institution or for the pursuit of the activity are met.
5. Decision on registration
Following the on-site verification of legal and operational requirements for the commencement of activity, the Banco de Portugal may adopt one of the following decisions:
- Registration of the institution in the special register, after checking whether the conditions for the pursuit of activity are met. The special registration of the electronic money institution covers the items listed in Article 66 of the RGICSF, applicable by virtue of Article 34(2) of the RJSPME. The electronic money institution may commence its activity upon its registration being completed.
- Refusal to proceed with the institution’s special registration, particularly when any of the authorisation conditions necessary for the setting-up of the electronic money institution or the pursuit of activity is not met, in accordance with Article 36 of the RJSPME.
Clarifications
The Banco de Portugal is prepared to clarify any specific issue regarding a project to set up an electronic money institution submitted to the Banco de Portugal in advance.
Questions can be sent by email (to dsp.registos.expediente@bportugal.pt) or by post to:
Banco de Portugal, Prudential Supervision Department, Authorisations Unit
R. Francisco Ribeiro, 2
1150-165 Lisbon
All questions submitted to the Banco de Portugal must be duly presented with a highly specific factual basis and be well-reasoned, in order to allow for an adequate analysis.
Related FAQs
Does the Banco de Portugal charge any fee as part of an electronic money institution authorisation and registration or supervision procedure?
No.
In which languages can the application for authorisation be submitted?
The applications for authorisation can be submitted in Portuguese or English.
Official documents (e.g. criminal record certificates) which are not issued by Portuguese authorities must be certified under the Hague Convention or duly legalised. If these are not drawn up in Portuguese or English, they must be accompanied by a certified translation in accordance with the Hague Convention or duly legalised, with information on the translation entity certifying its adequacy.
Translations of documents must be certified and accompanied by information on the translation entity certifying their suitability.
What should I do in case of changes to the information initially sent to the Banco de Portugal during the authorisation application procedure?
If, during the authorisation procedure, there is any change to the information included in the initial application or in the elements provided in the meantime (supervening fact), such change must be communicated to the Banco de Portugal as soon as possible and by means made available for this purpose, accompanied by all necessary supporting elements.
May the application for authorisation refer to an already incorporated commercial company?
Yes, the application for authorisation may refer to an already incorporated commercial company.
However, if the application refers to an already incorporated commercial company, this company may not carry out any activities pertaining to electronic money institutions, nor include in its company or business name any expressions suggesting such activity, until the authorisation and registration procedure with the Banco de Portugal is successfully completed.
Under Article 12(3) of the RJSPME, only undertakings authorised as electronic money institutions may include the term “electronic money institution” in their company or business name or use it in their activity.
In addition, under Article 21(1) and (2) of the RJSPME, if the activities other than the issuance of electronic money and payment services carried out by the commercial company impair or are likely to impair (i) the financial soundness or (ii) the proper performance of the supervisory tasks by the Banco de Portugal, the Banco de Portugal may determine, as a condition for granting authorisation, the setting-up of a commercial company whose sole purpose is to issue electronic money and, where applicable, to provide the payment services listed in Article 4(a) to (g) of the RJSPME.
Is a criminal record certificate issued more than a year ago deemed valid for the purposes of the application for authorisation?
Criminal record certificates are deemed valid if they contain their validity period and this has not lapsed. In particular, the validity period of Portuguese criminal records is three months from the date of issue; thus, a certificate issued more than a year ago would not be valid for this purpose.
May the Banco de Portugal make the information contained in the authorisation procedure publicly available?
No, the Banco de Portugal is subject to the duty of professional secrecy under Article 80 of the RGICSF.
The application for authorising the setting-up of an electronic money institution must be submitted to the Banco de Portugal by the legal representative of the entity to be set up? For the analysis of the application, is it necessary to attach a power of attorney to the documents submitted?
Yes. The initial application must be either:
- signed by the applicant(s) with duly witnessed signatures;
- signed by the representatives of the applicants, provided that they have the necessary representation authority and that they send the power of attorney or the document evidencing the representation authority of the persons concerned for the relevant application.
I have a project or intend to pursue a certain activity. How do I know if I need to get an authorisation for this from the Banco de Portugal?
You should submit the intended project to the Banco de Portugal, with a high degree of detail, particularly with regard to the identification and delimitation of the activity to be carried out and the intended business model. This information is essential for a correct legal framing of your situation and, therefore, for identifying the conditions which may be required for the setting-up of the company and its placing under supervision by the Banco de Portugal or not.
Natural and legal persons intending to provide:
- exclusively account information services, under Article 2(tt) and Article 4(h) of the RJSPME, must submit a request for registration with the Banco de Portugal, under Article 22 of the RJSPME;
- account information services together with other payment service(s) (Article 4(a) to (g) of the RJSPME) must apply for authorisation as payment institution or electronic money institution (if they intend to issue electronic money) with the Banco de Portugal under Article 18 et seq. of the RJSPME.
In accordance with Article 25(1) of the RJSPME, inclusion of payment services or extension of the range of payment services, among those listed in Article 4 of that Legal Framework, which electronic money institutions already established propose to provide is also subject to prior authorisation to be granted by the Banco de Portugal. Such intention to include payment services or extend their range must be materialised by means of a request for changes to the corporate purpose in the articles of association, in accordance with Article 25(1)(b) of the RJSPME.
Are the provision of point of sale (POS) terminals and communication networks and the processing of data necessary for the provision of payment services subject to authorisation and registration with the Banco de Portugal?
Under Article 5(j) of the RJSPME, services provided by technical service providers, which support the provision of payment services, without them entering at any time into possession of the funds to be transferred, are not covered by the RJSPME. Thus, they are not subject to authorisation and registration with the Banco de Portugal.
The exclusion provided for in Article 5(j) of the RJSPME does not apply where these services are intended to support the provision of payment initiation services and account information services.
