Royal Decree 736/2019 on the legal regime for payment services and payment institutions came into force at the end of last year, continuing the implementation of payment services and other urgent financial measures and PSD2 in Spain.

Royal Decree 736/2019 of 20 December on the legal regime for payment services and payment institutions came into force on 25 December 2019.

The decree amends Royal Decree 778/2012 of 4 May, on the legal regime for electronic money institutions, and Royal Decree 84/2015 of 13 February implementing Law 10/2014 of 26 June on the organisation, supervision and solvency of credit institutions.

This new Royal Decree supplements the development of the Royal Decree-Law 19/2018 (RDL on Payment Services) of 23 November, on payment services and other urgent financial measures and the local transposition of the EU Directive 2015/2366 on payment services in the internal market (PSD2).

Structure of the Royal Decree

The Royal Decree is structured in a similar way to Royal Decree 712/2010 and comprises seven chapters on the:

  1. establishment of payment institutions, authorisation, articles of association amendments, extension of its activities and structural changes involving a payment institution;
  2. cross-border activity of payment institutions;
  3. outsourcing of functions;
  4. protection and safekeeping of the funds;
  5. regulation of hybrid institutions;
  6. term for limited networks according to Article 4(k) of the RDL on Payment Services; and
  7. penalty regime.

Key changes

The main changes introduced by the new Royal Decree, which already provides for an approval of the Spanish regulatory Sandbox, are:

Authorisation guidance

The Bank of Spain will publish guidance for applicants seeking authorisation as a payment institution on its website. This will provide detailed information on the procedures, legally established requirements and criteria applied in the authorisation and registration procedures. The guidance will be available in Spanish and English and will include a FAQs section.

Technological innovation

At the end of each quarter, the Bank of Spain will inform the General Secretariat of the Treasury and International Finance of the Ministry of Economy and Enterprise (Secretaría General del Tesoro y Financiación Internacional del Ministerio de Economía y Empresa), among others, about the degree of technology financial innovation that in its view, entails the proposed business model with respect to market practices, as well as a description of this model.

This new characteristic relates to the Preliminary Draft Law on Measures for the Digital Transformation of the Financial System, commonly referred to as the sandbox,, which was approved in February 2019 and whose final approval will attract significant investments and projects that provide for FinTech innovation.

Cross-border activity

The cross-border activity regime is amended so that Spanish payment institutions must request prior authorisation from the Bank of Spain, provided that the amount of the envisaged investment is equal to, or greater than, 10% of its own funds, in the following cases:

  • establishment of an akin institution to a payment institution in a non-EU Member State;
  • acquisition of a qualifying holding or the taking over (directly or through entities controlled by the Spanish payment institution) of an akin institution in a non-EU Member State.

Use of agents

Regarding the use of agents to develop the activity of payment services, the Royal Decree introduces a number of control, supervision and training measures for the network of agents. Additionally, the prohibition on agents acting through sub-agents and the use of their bank accounts to deposit customers' funds is removed.

Outsourcing of functions

As to the outsourcing of functions, regulated entities are required to include a self-evaluation of the potential effect of any risks when informing the Bank of Spain about the operational function to be outsourced.

Also, the outsourcing of non-material operational functions, or any changes, must also be reported to the Bank of Spain within one month from the time they become effective.

Safeguarding funds

With respect to safeguarding funds, the funds deposited in the separated account may exceed those received from payment service or electronic money users through another payment service provider when:

  • this circumstance and the amount of the excess have been communicated to the Bank of Spain one month in advance; and
  • the payment institution has enough of its own funds to continue to comply with its capital and equity requirements, once this amount has been deducted from them.

Every three years, in January, payment institutions need to inform the Bank of Spain which of the three methods listed in the annex of the Royal Decree will be applied to calculate its own funds during the following three years.

Granting credit

Payment or electronic money institutions may grant credit in accordance with the provisions of the RDL on Payment Services and Law 21/2011. The granting of credit is subject to the transparency and customer protection provisions set forth in Article 5 of Law 10/2014 of 26 June and its implementing regulations, as well as Law 16/2011 of 24 June on consumer credit agreements.

Limited networks

The Royal Decree amends the applicable regime to limited networks, expanding the list of payment instruments to be used in a limited way that are not subject to payment regulations, provided that a number of requirements are met. Payment transactions for electronic communication services are also excluded from the application of the Royal Decree, as well as payment transactions for urban mobility services, tickets for cultural services, museums, exhibitions or similar.


The Royal Decree entered into force the day after its publication, except:

  • the requirement for the Bank of Spain to publish on its website guidance for applicants on how to obtain authorisation as a payment institution, which will apply on 24 February 2020; and
  • compliance of the credit activity referred to in Article 20(3) of the RDL on Payment Services and Article 8(1)(b) of Law 21/2011 of 26 July on electronic money with the transparency and customer protection provisions laid down in Article 5 of Law 10/2014 of 26 June and its implementing regulations, established in Article 22(1), will apply on 24 June 2020.

Next steps

Please get in touch if you would like to know how the changes introduced by the Royal Decree could affect you and take a look at our comprehensive PSD2 toolkit, an interactive platform that helps you identify and understand your PSD2 obligations, together with detailed analysis from our industry-leading payments lawyers.

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.