As of 29 September 2023, Small Payment Institutions are, in principle, obliged to transfer funds received from the payer to the recipient's payment account by bank transfer order only via a payment account established for such transfers. The provision is written in complicated language, so we will try to explain the practical sense of the new regulation.

What account is the Polish legislator referring to?

Article 117ha of the Payment Services Act imposes an obligation on Small Payment Institutions to use a dedicated payment account for the transfer of funds that are executed by the SPI in order to carry out bank transfer services ordered by users. However, the question that needs to be raised at this point is whether the SPI is required to have such a bank account only for the transfer orders requested by users? Or can other funds be held there? This question should be well analysed, as the legislator was not precise enough when creating the provision.

Therefore, it should be assumed that such an account may also be used to for depositing funds received from users. The purpose of such an account is solely to handle funds deposited by users, from which payment transactions will then be carried out in the context of the execution of the bank transfer service and beyond.

Is the SPI limited to bank transfers only?

In addition, another doubt that arises from the imprecise wording of the provision is whether such an account can be used by the SPI to carry out transfers for the execution of other services ordered by SPI users other than bank transfer services, such as, for example, card transactions or payment orders, as is suggested from the wording of Article 3(1)(2)(b) of the Payment Services Act. The answer is as following. Of course, the SPI can also carry out transactions ordered by users under payment orders or card transactions, which will be carried out from an account dedicated to handling users' funds.

Practical implementation.

Given the significant uncertainties, it is worth discussing the practical application of the provision. In practice, the SPI is required to have a standard bank account, which will not be used for any purpose other than the management of users' funds and, in particular, the execution of (1) bank transfers ordered by users; (2) card transactions ordered by users; (3) payment orders ordered by users. It must be guaranteed that no funds held by the SPI for any purpose other than the provision of payment services are placed on such an account. SPI wishing to manage its own funds must maintain a separate bank account for this purpose, as SPI cannot mix its own funds with those of its customers.

The hidden purpose of the new provision.

However, the following question must be asked at this point. Why did the legislator then introduce such a provision? The Parliamentary Explanatory Memorandum to the amendment to the Act indicates that such a solution "is aimed at safeguarding the funds entrusted to SPIs by the users, by separating them from the trader's funds held on another account and the risks associated with the trader's other activities, by reducing the risk of money laundering and ensuring an adequate level of supervisory control exercised by the FSA in this regard".

The above reasoning is reflected in the second part of the article, which states that in the event of enforcement proceedings against SPI, the funds held in the payment account for the management of users' funds shall be free from seizure, unless the enforcement proceedings concern to the users' claims against the SPI for non-performance or misperformance of payment services through that account.

So the legislator's motivation was a solution to protect users' funds against possible enforcement proceedings against the SPI's assets.

Is this something new or was it already in the legislation?

Given that the regulations on National Payment Institutions [Articles 78(1) and 80(1) and (3)] specifying the issues of non-mixing of own and users' funds and enforcement of users' funds also apply to SPI, it can be concluded that the new regulation is simply intended to specify these issues within the framework of the activities carried out by SPI, as there was previously no provision in the law referring exclusively to SPI.

Time for a conclusion.

SPI wishing to commence a payment services business must be mindful of the statutory requirement to undertake the business within 12 months from the date of registration, otherwise it may be removed from the register. The commencement of payment services activities is connected with user service, for which the legislator requires with new regulations regarding managing of a separate bank account.

In summary, the SPI is obliged to have a separate bank account for the management of users' funds only. Such an account must be used by the SPI in the event of:

  • an order by a user for a bank transfer;
  • an order by a user for a payment order;
  • an order by a user for card transaction.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.