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Amendment to the payment services act – significant changes to MIP operations

On August 10, 2022, a new draft of the bill with amendments to the Payment Services Law and the Foreign Exchange Law (list number UD52) was presented on the website of the Government Legislation Center. This bill provides for a number of key amendments to the Payment Services Act.

The legislator has finally leaned into the problem of unauthorized payment transactions

I wrote about the problem of unauthorized payment transactions in the articles: “Amendment of the Payment Services Act – answer to the problem of return of unauthorized transactions” and “Return of unauthorized transactions – controversial allegations of the President of UOKiK against the banking sector“.

The draft amendment to the Payment Services Act also contains a number of other changes in the area of:

  • functioning of small payment institutions (MIPs) and payment service offices;
  • information obligations to the NBP (polish central bank);
  • established definitions, and many others.
    In this article, however, I will focus on changes relating to the operation of small payment institutions, which are broadly affected by the planned amendment.

New requirements for MIP regarding payment account for transferring funds by credit transfer

Under the proposed Article 117ha, an MIP will be able to transfer funds received from a payer to a payee’s payment account by means of a credit transfer order only through a payment account established for such transfers, maintained for the small payment institution by a bank (including a branch of a foreign bank and a credit institution) or a „SKOK” (credit union).

The funds collected in this way in the event that enforcement proceedings are initiated against a small payment institution will be protected and, in principle, will be free from seizure. As the legislator indicates in the explanatory memorandum to the bill: “This solution is aimed at securing the funds entrusted to MIPs by users, by separating them from the entrepreneur’s funds held for other reasons and risks associated with other activities of the entrepreneur, as well as reducing the risk of money laundering and ensuring an adequate level of supervisory control performed by the KNF (polish financial supervisory authority) in this regard.

However, there is no doubt that the above mentioned amendment is in fact a certain limitation of the scope of activities permitted to MIPs and will thus not be welcomed by the market.

The draft amendment to the Payment Services Act also provides for an additional information requirement, according to which the MIP will be obliged to report to the KNF within 14 days the fact of concluding or amending the agreement of the payment account used to transfer funds received from the payer to the payee’s payment account by means of a transfer order, together with a copy of the agreement of this account (the account referred to in the added Article 117ha).

Expansion of the scope of documents submitted to the application for entry in the MIP register

Another key change envisaged by the bill is the expansion of the scope of documents that are submitted at the application stage for entry into the register of small payment institutions.

After the amendment, the application will additionally need to be accompanied by:

  • a description of the organizational arrangements to calculate the total monthly amount of payment transactions and the performance of anti-money laundering and counter-terrorist financing obligations;
  • a business program and financial plan for the first 12 months of operations, as well as an up-to-date risk management procedure;
  • a description of other business activities, activities in the field of ancillary services closely related to the provision of payment services or payment credit services, with an indication of their type, which the small payment institution conducts or intends to conduct;
  • A description of the method of protecting users’ funds received for the purpose of performing payment transactions, and an undertaking to immediately inform the KNF of any changes thereto;
  • contact details of the small payment institution, including the name, telephone number and e-mail address of the person authorized to represent it;
  • the correspondence address of the small payment institution – for delivery of written correspondence.

In addition, the small payment institution will be explicitly required to promptly notify the KNF in the event of a change in the data submitted with the application, as well as a change in the above documents and information.

The establishment of the above additional requirements has long appeared in the discussion on changing the operation and registration of small payment institutions. In doing so, it should be noted that:

  • part of the additional documents the MIP had to have on the date of application anyway;
  • and another part it had to submit anyway, in response to the so-called sector letter of the KNF.

Therefore this amendment organizes the existing regulations and establishes legal requirements for the practices adopted by the KNF. Nonetheless, there is no doubt that the above mentioned change involves some complexity in the MIP application stage.

Other changes

The legislator has also provided for additional sanctions relating to the activities carried out by small payment institutions. Pursuant to the planned addition of Article 117(3) of the Payment Services Law, if the limit on the average total amount of payment transactions is exceeded and the related obligations are not fulfilled, the KNF shall be authorized to impose a fine on a small payment institution in an amount not exceeding PLN 1,000 for each day of delay, but not exceeding PLN 250,000.

In addition to the additional information obligations described above, the legislator has also provided for a minor change relating to the method of providing periodic information on the total value and number of payment transactions. This is because a requirement is to be added to present data broken down by individual payment services.


The scope of the proposed changes relating to the registration and operation of small payment institutions is therefore significant. The implementation of the aforementioned changes will also have a practical impact, and thus the changes should be considered important. At this point, however, it should be emphasized that the described changes are still a draft. It is therefore not a foregone conclusion that they will be introduced in their current form.

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