What it usually looks like
A business wants to accept payments on behalf of other businesses, run accounts and wallets, carry out money transfers, issue cards or electronic money. Sometimes it is a technology company with a ready-made app, sometimes an online shop, a retail chain or an intermediary that has so far settled payments through an external provider and wants to do it itself. The first question is always the same: is what we are planning a payment service – and if so, what registration or authorisation does it require?
There are several routes. The simplest is registration as a small payment institution – faster and cheaper, but with limits: operations in Poland only, caps on the value of transactions and on the funds held for a single user, and some services excluded. Full freedom comes with authorisation from the KNF (the Polish Financial Supervision Authority) as a domestic payment institution – with higher requirements for capital, organisation and procedures, but with the option of operating in other European Union countries as well. Alongside them there are narrower forms: a payment services office for money transfers only, and registration for providers offering only account information services. Issuing electronic money has its own category of authorisation, although the proceedings look similar.
Whatever the route, the regulator looks at the same things: whether the business knows what it is doing, whether it has the money to start, whether it can safeguard users’ funds and whether its procedures will work when something goes wrong. Then there is day-to-day life after registration or authorisation: reports, fees, notifying changes, inspections. A well-prepared application means not only shorter proceedings but also a well-organised business – the documents written for the KNF then become its internal rulebook.
Points to watch
The model first, then the application
Before the application is written, you need to describe precisely how the money flows: who pays whom, through whose accounts, and who is responsible for the funds at which moment. This determines whether the service requires authorisation at all and which route is right. Changing the model during the proceedings usually means rewriting the documents from scratch.
A small payment institution has limits
Registration allows you to operate only in Poland, within limits on the value of transactions and funds held. It does not cover some services, including payment initiation and account information. When the business grows and the limits are no longer enough, it has to apply for authorisation as a domestic payment institution – it is better to start this early than to halt sales.
Capital and organisation are not a formality
A domestic payment institution must have initial capital appropriate to the scope of its services and maintain own funds for as long as it operates. Add to that a management board with the right experience and a good reputation, a clear division of responsibilities, and rules for risk management, security and business continuity. The KNF also checks who stands behind the company as its owner.
Users’ funds must be kept separate
Money received from users must not be mixed with the business’s own money. It is held in a segregated account or covered by a guarantee or insurance, it may not be used to finance the business’s own activities, and it is protected if the business gets into difficulty. The way it is safeguarded is described in the application and then has to be applied every day.
Anti-money laundering checks from the very first user
A payment institution must know its users: check who they are, who really stands behind a business and where the funds come from, and report suspicious transactions. It needs a risk assessment, an internal procedure, a designated responsible person and training. This is one of the most closely examined areas – both in the application and in later inspections.
The process has its own pace
An application to the KNF has a statutory time limit for its consideration, but in practice the proceedings take longer: the authority asks questions and requests additions and explanations, each with its own deadline. It is worth planning the launch with time to spare and not signing contracts that assume a specific date for obtaining authorisation.
How we work – step by step
We assess the model
Together with you, we map out the flow of money and check which of the planned activities are payment services and which are not. Sometimes part of the plan turns out to be possible without authorisation or in a simpler form.
We choose the route
We compare registration as a small payment institution with authorisation as a domestic payment institution – and the narrower forms, if they fit. We say plainly how much time and work each one requires and what the business will be able to do once it has it. The decision is yours.
We prepare the documentation and procedures
We write the programme of operations and the financial plan, and the procedures for risk management, security, anti-money laundering, safeguarding users’ funds and handling complaints. Together with the management board we set up the company’s structure, capital and agreements with agents and technology providers.
We file the application and handle the proceedings
We prepare the application to the KNF with the full set of attachments, and then answer questions and requests for additional information. We represent the business before the KNF until the proceedings end – with registration or the grant of authorisation.
We prepare the business for launch
Before the first transaction we check that accounts, user agreements, terms and conditions and procedures work as described in the application. We go through what needs to be done, and when, with the people who will apply them.
We keep track of obligations after registration or authorisation
We draw up a calendar of reports, fees and notifications to the KNF, and help with changes to the management board, owners or agents and with supervisory inspections. When the business outgrows small payment institution status, we take it through to authorisation.