Payment Service Provider- PSP Licensing in Georgia
PSP licensing in the republic of Georgia

Payment Service Provider- PSP Licensing in Georgia

What is Payment Service Provider & benefits for PSP

Let’s start with giving explanation about what payment service provider is. It is a kind of company which receives, authenticates and finally, executes e-payments without merchant interference.The payment service provider or so called PSP allows merchants using different payment methods,for instance, such as Visa, Online Bank Transferring and PayPal – it makes payments still without merchant interference to the costumers. Instead of signing to a contract with each provider, merchants only deal with one party and can still offer a wide range of payment options in stores and such institutions.

Maybe you also wander benefits of payment service provider, so they are:

The certain payment service provider is known the appropriate payment methods for varied markets and target groups.

Using PSP means making things easier for traders and merchants. With just one link you can get the most important payment methods in your facility store etc.

additional services as a PSP includes for example  Fraud prevention and the risks management.

Setting up Payment Service Provider company in Georgia

register payment service provider company in Georgia

I would like to tell you about the license of the Payment Service Provider (PSP) of the Republic of Georgia – a development country evolving over a time both, politically and economically situated at the doors of the European Union the crossroads between Europe and Asia. Recognized Payment Service Provider (PSP) in Tbilisi, in the middle of the Georgian capital. Currently, no country provides entrepreneurs with this financial flexibility and freelance as the Republic of Georgia does today, and to create a PSP licensed entity without the enormous demands on additional capital or staff. The permit of the payment service provider issued by the National Bank of Georgia allows the legal entity to manage payment systems on the territory of Georgia and provide the services provided for by the Law of Georgia on Payment Systems and Payment Services.Take advantage of this.  For related Law regulating PSP activity in Georgia you can refer to this link. Most importantly, pay attention to the Order of the President of the National Bank of Georgia №29 / 04 On Approval of the Rules for Registration and Regulation of the Payment Service Provider.  I understand that you will face problems with the law  because of the language on the first place and as well as due to it’s complexity, therefore on this we will translate most important aspects of the law for you.

  • Volunteer individuals, I mean applicants, can take advantage with several laws on the processing of the world’s most liberal, banking and electronic money, especially on the inflow and outflow of foreign customers.
  • Georgia isn’t a member of the EU, but is adapted to certain parts of European legislation; But it has enacted its own local laws to protect the domestic financial industry to avoid unnecessary regulation.
  • Georgia is a full member of MONEYVAL, which is one of the regional bodies of the FATF (FSRB) and must carry out the actions of the same working group to prevent money laundering and terrorist financing.
  • Georgian banks are the most flexible in terms of customer assistance, services, fees, compliance in the Middle East and Europe. Banks are connected to the IBAN network and fully SWIFT members.
  • Georgia offers even licensed / recognized persons to arrange their own free zone (free work without taxes)
  • The issuing body is the National Bank of Georgia (NBG)
  • Given its location, Georgia is geographically strategically perfect for starting a business and connecting with the East West.
  • Georgia is attractive for European or, in general, world investors and licensors. You can get it by plane from any major airport in an hour from the Middle East, Russia and Europe.
  • You will get access to major banks, other payment providers, MasterCard and VISA card members in order to be able to issue prepaid cards.
  • Georgia enjoys an excellent reputation as a modern financial market, which will make it possible even for offshore customers
  • Minimum requirements for office matters, directors and staff (you enjoy very low running costs)
  • Users of your PSP unit enjoy maximum privacy – no data exchange is regulated or automated.
  • Georgia has applied as a full member of the OECD
  • Cryptocurrency is prohibited in the Republic of Georgia. The Georgian PSP license allows you to start with e-money, cryptocurrency currency, signal issuance and initial coin offering (ICO).

the actions that can be done is listed below:

  • Services that provide debt relief from the payer’s account and related operations;
  • Services related to the creditor’s account and related transactions;
  • making payments by direct debit (including one-time orders), payment cards, or other electronic means, or by credit transfers (including permanent orders), in the funds or credit resources of the customer of the payment service user;
  • Checking and / or purchasing payment instruments, including electronic money instruments;
  • Remittances;
  • Importing e-money (for example, issuing loans through ICOs and exchanging Fit money in cryptocurrency and returning cryptocurrency money in FIT money), making payment transactions via e-money via mobile phone, internet or any other electronic device;
  • Carrying out a payment transaction with the consent of the payer, provided by telecommunication, digital or IT devices, in favor of the telecommunications, IT system or network operator, acting between the intermediary payer and the payer, as well as between the customer and the supplier of goods or services

The report names Georgia in the 9th, low-tax economies, emphasizing the simplicity and credibility of Georgia’s tax system. The country has no restrictions on currency conversion or repatriation of capital and profits. On behalf of a third party, his license, credit card processing, etc., permission to conduct electronic payment operations is included in the license. By choosing a co-issuer, you will be able to issue your own “cards” and process payments as needed. 

Payment Service Provider Registration Procedure

The interested person must submit the following documents to the National Bank for registration as a provider:

  • Fully completed provider registration form
  • List of types of payment services to be provided by the provider
  • Schematic description of the payment service implementation, which includes detailed information on the information process and cash flow from the initiation of the payment transaction to its completion. If the interested person plans to provide several services after registration, then a separate scheme should be submitted for each service. If a foreign payment service provider is involved in the execution of the payment transaction as an intermediary or receiving provider, then a list of such providers shall be submitted, indicating their supervisory authorities;
  • A description of the electronic system used to provide payment services, which includes at least:
  1. A list of hardware and / or software used, with reference to the software manufacturer;
  2. A list of the means of communication and encryption algorithms used;
  3. Description of the interfaces through which information is exchanged between the electronic system and its users, as well as between the various components of the electronic system.
  • If the interested person is a joint stock company, then an extract of the relevant securities registrar from the securities register must be additionally submitted;
  • Information on the direct owners of the declared or supplemented capital of 10 percent or more of the interested person (hereinafter referred to as “significant shares”), as well as the beneficial owners
  • Documentation that allows the identification of the beneficial owner
  • Copies of the identity documents of the person (persons) authorized to represent the interested person
  • Certificate (s) on the conviction of the person (persons) authorized to represent the interested person and a significant share of both the direct and the beneficial owner (s).
  • A document certifying the right to use or own the real estate where the provider’s head office will be located.
  • Certificate / Permit issued by the relevant regulator / supervisor that the interested person has the right to provide payment services;
  • Information (strategy, plan or other), which confirms that the interested person plans to implement payment service activities on the territory of Georgia.

Other needed requirements to take into consider?!

  1. Only a legal entity established under the legislation of Georgia has the right to provide payment services in Georgia after registration with the National Bank.
  2. Documents issued by a foreign country to be submitted to the National Bank must be duly certified. The mentioned foreign language documents are submitted in the form of a notarized translation into Georgian.
  3. A person is prohibited from being a provider if he / she is considered to have committed a serious crime
  4. If the documents submitted by the interested person do not meet the requirements of the order, the National Bank shall set a deadline of 30 calendar days for the elimination of the deficiency and / or verification of the submitted data.
  5. The presence of incorrect information in the submitted documents is a ground for refusing to register as a provider.
  6. The National Bank shall make a decision on the registration or refusal of the provider registration within 60 calendar days after receiving the application for registration of a provider and other relevant documents.
  7. In case of refusal to register, the National Bank shall notify the interested person in writing, indicating the reason for the refusal to register.
  8. The provider, except for the provider that provides payment services only with small payment instruments, is obliged to provide the registration form of the payment service provider within 10 working days after the issuance of the registration decree. In accordance with the rules established by the relevant order of the Head of the Financial Monitoring Service of Georgia on the Rule on Transfer to the Service.

What personal Documentation is required?

  1. A notarized copy of the passport with an apostille (the passport must be valid for at least 6 months)
  2. a police officer’s certificate of cleanliness / a certificate of good conduct (if not in English, then certified in English) with an apostille; No more than 30 days
  3. Personal CV
  4. Name two – three (2-3) on behalf of the company offered by your company
  5. Confirmation of the address – if not in English, then please verify the English translation

Okay now let’s divide it into parts and list all the steps:

let’s submit your documentation first us to send our lawyers to check if it’s enough and prompted

The formation of the company usually takes 1 week until all the submitted documents are available and the company is included in the register. You will get a second director on your side. This “nominee” director is responsible for opening a bank account and will fulfill the requirement that at least one member of the board lives in Georgia for 14 days a month.

This step also includes the entire configuration of documents (AML manual, business plans, application documents, license documents, general company information, documents, office rental and rental agreements, description of compliance manuals, software use, payment infrastructure, etc.). – All this will be done in Georgian (demand for the application process).

afer that opening the bank accounts and submit all codes, credit cards, online banking accesses

Setting up of internal procedures

payment service provider company formation In Georgia

We will assist the internal policy to be implemented within the first 4-6 months, except for the previous documents, after the issuance of the license by the National Bank of Georgia. All documents will be prepared in Georgian – of course, you can provide all the information and useful information for us also in German or English. We are multilingual. Don’t worry about your side:

  1. The internal policy should address the following issues
  • Organizational structure of the company and clearly defined responsibilities;
  • Distribution of duties and adequate internal control mechanisms;
  • Money laundering and terrorist financing policies;
  • Comprehensive and well-documented operational and technical procedures;
  • Information security measures;
  • Financial reporting and audit procedures;
  • Statistical data collection and processing system is effective;
  • Incident recording system.

 2. Payment for the operation To ensure security and integrity, the supplier must have a payment scheme, the complexity of adequate risk management procedures.

 3.The service provider is obliged to provide its equipment, software and other technical means of reliable operation.

 4. Existence of a proper incident recording system

 5. The payment service provider in the scheme to ensure the proper functioning of the supplement must have:

  • the rules and procedures that clearly define the service provider, the outsourcing company, the agent, the trade / service facilities, and the rights and obligations of the other Contracting Parties;
  • Continuity of payment service framework, security and reliability procedures designed to overcome major situations and special control and management measures that include the system and platform (both internal and external – agent / outsourcing);
  • analysis of the weaknesses and inefficiencies of the payment service activities and measures to eliminate them;
  • services for payment of expected risk identification, management and monitoring procedures.

 6. Money laundering policies as well as customer authentication

 7. supervisory board

Activities allowed for a payment service provider

1. The payment service provider has the right to carry out only the following activities in addition to the payment services provided by law:

  • provide services closely related to the implementation of payment services, such as currency exchange, confirmation of payment operations, data storage and processing;
  • Management of the payment system
  • Loan issuance when providing payment services in case of the following conditions:
  1. Loan issuance is not the main activity and the loan is issued only for payment operations;
  2. The loan issued for the payment transaction must be repaid no later than 12 months;
  3. The loan is not issued with the customer’s cash;
  4. The total amount of loans issued shall not exceed the norms established by the National Bank of Georgia.

2. The payment service provider does not have the right to withdraw funds from the general public, except in cases provided by law.

The fee for the registration of the provider is set at 5000 (five thousand) GEL.

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