High requirements for providers of payment services and financial transfer business in Germany

13. Februar 2017 – 15:27

The provision of payment services is a business subject to authorization. The Provision of payment services and financial transfer business requires a permit from the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin).

What needs to be considered as a payment service is defined by Art. 1 (2) no. 1 to no. 6 payment services supervision law (ZAG). There are six possible alternatives of payment services:

– deposit and disbursement business (No.1)

– payment transaction (No.2)

– payment business with loan extension (No.3)

– payment authorization transaction (No.4)

– digitized payment transaction (No.5)

– financial transactions (No. 6)

If you file for permission the application to BaFin must contain

– a description of the payment services which are to be provided in the future, and an explanation of their execution, Art. 8 (3) no. 1 ZAG i.V.m. Art. 2 (3) ZAGAnzV

– a plausibel budget planning for the first three years, Art. 8 (3) no.2 ZAG i.V.m. Art. 2 ZAGAnzV

– a prove of the initial capital according to Art. 9 no.3 ZAG

– a description of the measures to fulfill the safety requirements according to Art. 13 ZAG

– a description of the corporate management and the internal control mechanisms according to Art. 8 (3) no.6 ZAG i.V.m. Art. 2 (8) ZAGAnzV

– an explanation of the arrangements made to comply with Art 22 ZAG and the requirements of the Money Laundering Act.

– a description of the organizational structure according to Art. 8 (3) no. 7 ZAG i.V.m. Art. 2 (9) ZAGAnzV

– A list of the holders of significant participations pursuant to Art. 8 (3) no. 8 ZAG i.V.m. Art. 2 (10) ZAG

– The names of the managers, together with proof of their reliability, in accordance with Art. 8 (3) no. 9 ZAG i.V.m. Art. 2 (10) and (11) ZAGAnzV

– The names of the statutory auditors pursuant to Art. 8 (3) no. 10 ZAG

– The legal form of the company, the articles of association and the registered office of the company pursuant to Art. 8 (3) no. 12 ZAG.

Payment service providers, especially in the financial transfer business, are subject to high regulatory requirements for the prevention of money laundering and terrorist financing. The Payment Services Supervision Law (ZAG), the Financial Services Supervision Act (FinDAG), the Money Laundering Act (GwG) and the German Banking Act (KWG)  govern and regulate the provision of payment services in the Federal Republic of Germany. The German Federal Reserve also provides comprehensive statistics on payment transactions in Germany. All institutes which process payments (clearing etc.) are recorded for their customers. This is the responsibility of the Institut, which is charged by the customer, irrespective of whether it is used for the processing of the payment transactions by another institut.

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