In compliance with the regulation changes of 1 October 2015 in Serbia, and accordance with the Law on Payment Services (Official gazette RS 139/2014), the payment services can be provided by legal entities whose only activity is payment operations services or legal entities with so-called hybrid activities, i.e. a legal entity performing other activities which are not, or do not have to be related with payment service providing.
Many companies contacted us with interest to provide payment services on the Serbian market.
It’s not an easy process to obtain the required licenses and to attract clients, especially for the new startups. Any “money business” is a business of trust, and without a prior track record, it’s a challenge to earn that trust. While the most important part of the planning stage is coming up with the unique value proposition and viable niche, it’s also important to understand which license the business will actually need: the Electronic Money Institution license or the Payment institution license. What are the differences?
Payment institution under Law on Payment Services offers services of execution of payment transactions, including credit transfers and direct debits, issuing or acquiring payment instruments, money remittances, foreign exchange services, and similar services. Payment Institution license is suitable for credit card processors, payment account operators, remittance businesses, foreign exchange businesses, payment initiation companies, and so forth. The capital requirement is from 20.000€ to 125 000€.
This is a great solution specifically for companies collecting utility payments and further distributing the funds among utility suppliers, or entities accepting payments on behalf of third parties (e.g. online merchants or mobile network operators).
Electronic Money Institution is almost identical, which makes it confusing. Electronic Money Institution under Law on Payment Services is a business very similar to Payment Institution, but there’s a key differentiator. Electronic Money Institution (EMI) can issue electronic money (the digital equivalent of cash stored on an electronic device). EMI can do all the things the Payment Institution can do and is also is allowed to provide IBAN accounts, payment cards and e-wallets. The capital requirement is 350 000€.
Can we consider a Cryptocurrency such as the Bitcoin as Electronic Money?
Aside from being digital, there are few similarities between Bitcoin and e-money. Like credit cards, debit cards and Paypal, e-money is a mechanism to interact with government-issued and regulated currencies such as dollars and euros. Bitcoin is an independent virtual currency that has no central regulation and can be transferred anonymously.
Electronic money institutions (EMIs) moving fast and thinking freely. Innovative services based on e-wallets and prepaid cards are commonplace and support a wide variety of use cases, from payroll, to gift cards, loyalty, gaming, FX transfers, personal finance management solutions and more.
They can also connect to a ready-to-go ecosystem of merchants, banks and other service providers, and work these connections to create new data and payment-based services uninhibited by national borders and old-world networks.
If you are planning to provide payment services or issue electronic money in Serbia, you will need to apply with the National Bank of Serbia (NBS) for a license as a Payment Institution (PI) or Electronic Money Institution (EMI).
WTS and Alpha Partners team will help you to apply for a license and navigate your way through the various documentation and get you to the relevant sections that’s the most applicable for the type of service your business will provide.
Please contact us for more information.
Swiss International Partners – In partnership with Welcome to Serbia and Alpha Partners
Email: firstname.lastname@example.org, Mob:+381 60 062 29 43 (WhatsApp, Viber, Telegram)