Malta is the ideal jurisdiction in which to set up a Financial Institution under the Payment Services Directive. Payment Services are regulated in Malta by the Financial Institutions Act which also regulates Electronic Money Institutions. CSB Group’s professionals are geared to assist clients with the licensing of the payment institution.
The Malta Payment Services Directive
Following the transposition of the Payment Services Directive (Directive 2007/64/EC) into local legislation, standalone payment service providers (“PSPs”) or “payment institutions” are regulated in Malta by the Financial Institutions Act (Chapter 376, Laws of Malta), which also regulates Electronic Money Institutions (since the 1st July 2011) and other financial services.
Malta-Licensed Payment Institutions – Permitted Activities
A payment institution licensed in Malta may undertake the following activities:
- 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 among which:
- 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;
4. Execution of payment transactions where the funds are covered by a credit line for a payment service user among which:
- 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;
5. Issuing and/or acquiring of payment instruments;
6. Money remittance;
7. Execution of payment transactions where the consent of the payer to a payment transaction is transmitted by means of any telecommunication, digital or IT device and the payment is made to the telecommunication, IT system or network operator, acting solely as an intermediary on behalf of the payment service user and the supplier of the goods and services.
Malta-Licensed Payment Institutions – Additional Permitted Activities
Licensed payment institutions may also carry out the following additional activities:
- The provision of operational and closely related ancillary services such as ensuring execution of payment transactions, foreign exchange services strictly in relation to payment services, safekeeping activities, and storage and processing of data;
- The operation of payment systems (in terms of the Malta Financial Institutions Act, “payment system” means a funds transfer system with formal and standardized arrangements and common rules for the processing, clearing and/or settlement of payment transactions);
- Business activities other than the provision of payment services, provided that these do not impair or threaten to impair either the financial soundness of the institution or the ability of the competent authority to monitor the financial institution’s compliance with applicable laws and regulations;
- When payment institutions engage in the provision of payment services, they may only hold payment accounts used exclusively for transactions; any funds received by payment institutions from payment service users with a view to the provision of payment services shall not constitute a deposit or other repayable funds within the meaning of the Banking Act
Payment institutions may grant credit related to payment services referred to in paragraphs (D), (E) or (G) above only if the following requirements are met:
- The credit is ancillary and granted exclusively in connection with the execution of a transaction; and
- Notwithstanding national rules on providing credit by credit cards, the credit granted in connection with a payment and executed with the act shall be repaid within a short period which shall in no case exceed twelve months; and
- Such credit is not granted from the funds received or held for the purpose of executing a payment transaction; and
- The own funds of the payment institution are at all times, to the satisfaction of the supervisory authority, appropriate in view of the overall amount of credit granted.
Why US (Key Strengths)
- We will advise you on the optimal legal structure for your requirements, size, expectations and circumstances. We have extensive knowledge of a wide range of legal structures in all major jurisdictions. (Securities, Banking, Insurance, Investment Management, Gaming and many more)
- Valsen will assist to complete every form for each process in the best way we know how (Based on our many years’ experience with various regulators and service providers across the world)
- We are very hands on in the post filing period checking with re regulator and service providers and updating you regularly. Any queries raised by the regulators and service providers during processing will be quickly synthesized by us and we shall craft the right responses to move the process forward fast.
- We can provide you with fit and proper directors in case you need. We have a wide network of qualified and experienced lawyers, chartered accountants, chartered financial analysts, wealth managers, FX experts, Investment advisors etc. of international pedigree.
- We have a full in-house compliance support for all compliance requirements with the regulator and service providers
- Through our extensive network, we provide sign up services with major service providers including but not limited to; Liquidity providers, technology providers, custodians, prime brokers, legal advisors, auditors, payment gateway providers among others.