Regulatory Alerts2012-08-15
Banks' Responsibility in Entering Merchant Agreements
The Norwegian Financial Supervisory Authority (Finanstilsynet) clarifies that banks must ensure merchant agreements are exclusively concluded with the actual sales location and that payment terminal settlements flow directly from the payer to the merchant's account. The authority warns that terminal lessors intercepting transaction funds act as intermediaries in the payment flow, thereby conducting licensed payment services. Consequently, such lessors are subject to licensing requirements under the Financial Business Act § 4b-1, and banks must enforce strict customer control and agreement frameworks to prevent regulatory breaches.
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