The law overhauls Ukraine’s payment legislation, which for long hav regulated only regular money remittance services. In a statement on Wednesday, The NBU, Ukraine’s Central Bank said the policy will be able to ‘launch a long-awaited process of updating Ukraine’s system of payments’.
Key takeaways
New players on payment market
- Apart from old players like NBU, banks and postal operators, the law will see arrival of new players like payment and e-money institutions, branches of foreign payments institutions, operators of non-financial payment services and payments systems.
Overhaul of payments services
- Now on, they will take in 7 regular financial payment services and 2 non-financial ones (payment initiation and account information services, and technological services like processing, clearing, operational, and informational services)
Entities now made eligible to render payment services independently
- Operators of non-financial payment services are now entitled to open payments accounts, issue payment cards and e-money. The right is granted to payments institutions, branches of foreign payment institutions, e-money institutions, operators of non-financial payment services, postal operators
- The law removes hurdles for non-financial payments institutions allowing them to render payments services independently
New role of the regulator
- NBU will still be entitled to establishing systems of interbank settlements, retail payments and other payments systems for payments transactions.
- NBU now gets a right to issue its own digital currency, e-hryvna, and set up the ‘regulator sandbox’ to test new services, technologies and instruments on payments market.
‘Open Banking’ plan
- Introduction of Ukraine’s ‘Open Banking’ concept set to be operative starting 2023, which will require providers of payment services to grant other market operators access to their APIs to enable exchange of data on approval from the regulator
- The policy also updates security compliance requirements for providers of payments services to make authentication processes stronger and protect clients from cyber fraud threats
National Bank of Ukraine claims the policy will help align domestic laws to European standards, ‘laying the legal groundwork for integration of Ukrainian and European payments markets’.