Notice No. 06/2014 of September 15: Payment Systems of Angola - Provision of Payment Services

Published in the Official Gazette, First Series, No. 182, of October 1

NOTICE No. 06/2014 of September 15

SUBJECT: Payment Systems of Angola Provision of Payment Services

Considering the relevance of payment services for the stability of the financial system, economic growth, and social development;

Given the need to clarify the regulatory framework for the provision of payment services, creating conditions for the emergence of initiatives that provide new and better functionalities, as well as access conditions for users, with guarantees of security and transparency;

Under the combined provisions of Article 7 of Law No. 5/05, of July 29 - Payment System Law, and Article 51 of Law No. 16/10, of July 15 - Bank of Angola Law;

I DETERMINE:

Chapter I General Provisions

Article 1 (Object) This Notice regulates the provision of payment services within the Payment System of Angola.

Article 2 (Scope) This Notice is applicable to payment service providers and payment subsystem operating companies.

Article 3 (Definitions) For the purposes of this Notice, the following terms are understood as: a) Agent: entity contracted by the payment service provider or the payment subsystem operating company to make services available to users; b) Beneficiary: final recipient of the funds subject to a payment transaction; c) Clearing: determination of the balances of payment service providers participating in a payment subsystem, resulting from their respective creditor and debtor positions vis-à-vis others, or balances between interoperable payment subsystems; d) Payment account: registration account held in the name of one or more users, operated in the execution of payment transactions; e) Payment completion: making funds available to the final beneficiary, through credit to their payment account or delivery of cash; f) Payment instruction: request made by a user to their payment service provider requesting the execution of a payment; g) Payment instrument: device and/or set of procedures to which the user resorts to issue a payment instruction; h) Interoperability: facility provided to the user of a payment subsystem to interact with users of other payment subsystems; i) Settlement: final, irrevocable, and unconditional settlement of the payment of clearing balances through debits and credits in the settlement accounts maintained by participants of the Real-Time Payment System (SPTR) at the Bank of Angola; j) Electronic money: value stored on an electronic device or system, representing a claim on the issuer and issued upon receipt of cash or book money, which allows the user to carry out payment transactions with persons other than the issuer; k) Payment transaction: act performed by the payer or the beneficiary, of depositing, transferring, or withdrawing funds, regardless of any underlying obligations; l) Payer: natural or legal person holding a payment account who authorizes a payment transaction from that account, or, in the absence of a payment account, the natural or legal person who issues a payment instruction; m) Payment Service Provider: Financial institution authorized by the Bank of Angola to provide payment services; n) Payment Services: services provided on a professional basis, which allow depositing cash, withdrawing cash, or transferring funds to or from payment accounts, as well as all operations necessary for the management of these accounts, including the issuance and acquisition of payment instruments, and the issuance and redemption of electronic money; o) Payment Subsystem Operating Company: Non-bank financial institution whose object is the management of infrastructures or central procedures of payment subsystems; p) Payment Service Company: Non-bank financial institution authorized to provide payment services under the Payment System Law of Angola and complementary regulation; q) Payment Subsystem: set of rules and procedures applicable to the processing and settlement of payment instruments and instructions, in which at least two payment service providers participate; r) Credit transfer: payment instrument by which the payer instructs their respective bank financial institution directly to credit or request the credit of a deposit account without recourse to any other payment instrument, such as a payment card or a mobile phone associated with a mobile payment system; s) User: natural or legal person who uses a payment service as a payer and/or beneficiary; t) Average value of electronic money in circulation: average of the total value of financial liabilities associated with electronic money issued at the end of each day during the last six months, calculated on the 1st day of each month and applied to that month;

Article 4 (Exclusions)

1. This Notice is not applicable to payment services based on paper-based payment instruments, namely checks, withdrawal orders, and postal orders.
2. This Notice is not applicable to services regarding payments that, due to their typology, must be settled on a gross basis in the SPTR – Real-Time Payment System.
3. Payment services and subsystems may also be excluded from the scope of this Notice if the Bank of Angola considers that they do not pose a risk to the normal functioning of payment transactions in the Payment System of Angola, considering the scope of services provided and the following parameters whose values will be defined in complementary regulation: a) Total value of payment transactions; b) Average value of electronic money in circulation; c) Number of transactions performed; d) Number of registered users; e) Effects of the functioning of the payment subsystem on the market.
4. Payment service providers or subsystem operators excluded from the scope of application of this Notice under the previous paragraph are obliged to the duty of information provided for in Article 15 of this Notice, in order to allow the Bank of Angola to exercise continuous assessment of the conditions that justified the aforementioned exclusion.

Chapter II. Payment Accounts and Payment Instruments

Article 5 (Payment Accounts)

1. Five types of payment accounts are defined, in accordance with Annex I of this Notice.
2. The contracting of accounts at levels 1 and 2 is exclusive to financial institutions authorized to receive deposits.
3. Payment accounts held with payment service companies and exchange houses must only be used for the provision of payment services.
4. Accounts at levels 3, 4, and 5 must be denominated exclusively in national currency.

Article 6 (Confidentiality of Information) Information collected by payment service providers regarding their users is confidential and must not be used for other purposes or provided to third parties without prior and explicit authorization from the same.

Article 7 (Information to users) In the provision of information regarding payment accounts and payment instruments, the provisions of paragraph 2 of Article 25 of this Notice apply.

Chapter III. Electronic Money

Article 8 (Conversion of Physical Money into Electronic Money)

1. The conversion of physical money into electronic money is carried out at the nominal value upon receipt of funds denominated in Kwanzas.
2. The values must be delivered in cash or book money by using a payment instrument debited from a level 1 or level 2 payment account.

Article 9 (Guarantee and Registration of Values)

1. Institutions authorized to convert physical money into electronic money must maintain, at all times, the availability of values corresponding to the electronic money issued.
2. Up to 25% (twenty-five percent) of the value of the conversion into electronic money may be represented by public debt securities.
3. The values of electronic money not covered by the provisions of the previous paragraph must be registered in own accounts, in which movements not related to the value of the conversion of physical money into electronic money carried out by the financial institution in question cannot be posted. 3.1. The value of the conversion of physical money into electronic money carried out by bank financial institutions or credit cooperatives must be registered in the CONTIF account indicated by the BNA. 3.2. The value of the conversion of physical money into electronic money carried out by payment service providers not included in paragraph 3.1 of this article must be deposited in bank financial institutions.
4. The resources maintained in payment accounts constitute separate property, which does not coincide with that of the payment service provider.

Article 10 (Remuneration) The possession of electronic money must not generate any remuneration or benefit, namely in the form of interest.

Article 11 (Redemption)

1. The user may request the redemption of electronic money at any time. 1.1. In situations where the user is the holder of a level 1 or level 2 payment account, for redemption, timeframes equal to or lower than the maximums defined by the Bank of Angola for the execution of credit transfers must be ensured. 1.2. In other cases, redemption must be completed within a maximum period of 1 business day.
2. The redemption of electronic money may only be subject to commissions, expenses, or other charges if they are contractually provided for and their value is reasonable and proportional, based on the costs actually borne by the issuer and not dependent on the value of the redemption. 2.1. Redemption initiated by the issuer cannot be subject to any commission, expense, or other charges, and is effected for the total monetary value of the electronic money.

Article 12 (Expiry) Balances of electronic money accounts that have not been operated on for a consecutive period of 15 years revert to the State.

Chapter IV. Payment Service Providers and Payment Subsystem Operating Companies

Article 13 (Operational Responsibilities)

1. Payment service providers and payment subsystem operating companies are responsible for submitting to the Bank of Angola the Manuals of Standards and Procedures (MSP) relating to the payment services they propose to provide and to the payment subsystems they propose to administer, respectively, in accordance with the provisions regarding the regulation of clearing houses and compensation and settlement subsystems of the Payment System of Angola, with the necessary adaptations; 1.1. Exempt from the obligation provided for in this paragraph are payment service providers that provide payment services within the framework of a payment subsystem.
2. The relationships between payment subsystem operating companies and their clients are established based on draft contracts that must appear as an annex to the MSPs mentioned in paragraph 1 of this article.
3. Payment subsystem operating companies must monitor and attest to the compliance of subsystem participants with the obligations defined in the MSPs.
4. Payment service providers and payment subsystem operating companies must take into account good practices and general principles applicable to their activity, emanating from reference international institutions, namely the BIS - Bank for International Settlements, the WB - World Bank, the ISO – International Organization for Standardization, and the FATF-GAFI – Financial Action Task Force.
5. The payment service provider may act as a representative in Angola of foreign payment service providers or payment subsystems, assuming full responsibility and obligations determined by this Notice and complementary regulation, for the type of intervention applicable.

Article 14 (Subcontracting)

1. Whenever the payment service provider or the payment subsystem operating company intends to subcontract an entity for the provision of relevant operational functions, it must inform the Bank of Angola at least 30 (thirty) days before the start of the subcontracting.
2. The payment service provider or payment subsystem operating company that entrusts third parties with the performance of operational functions must safeguard the quality of internal controls.
3. The payment service provider or payment subsystem operating company assumes responsibility arising from acts performed by subcontracted entities for the performance of functions mentioned in paragraph 1 of this article.
4. The subcontracting contract must provide for the obligation of the subcontracted entity to make available to the contracting party or directly to the Bank of Angola the information and documents regarding its activities, which are required by the Bank of Angola, in the exercise of its powers of supervision, control, and monitoring.
5. The subcontracted entity is subject to audits by the Bank of Angola, within the scope of the services it provides to the contracting entity.

Article 15 (Duty of Information) Payment service providers and payment subsystem operating companies must send information to the Bank of Angola regarding their services, in the periodicity and form to be defined in specific regulation.

Article 16 (Adhesion and Cancellation)

1. Payment service providers wishing to join a payment subsystem must communicate this fact to the Bank of Angola with a minimum advance notice of 30 (thirty) days.
2. The cancellation of the provision of payment services or the operation of a payment subsystem requires authorization from the Bank of Angola, which must be requested with a minimum advance notice of 30 (thirty) days from the date scheduled for cancellation.
3. The cancellation request must be accompanied by a plan that must include, at a minimum, the following: a) The timeframe provided for the closure of activities; b) A proposal for communication to users and the general public; c) Mechanisms to be adopted to mitigate potential risks, especially regarding the forms and timeframes for the settlement of pending transactions and the settlement of payment account balances, where applicable.
4. The approval of the cancellation request does not exempt the payment service provider or the payment subsystem operating company from complying with obligations arising from their assumed contractual relationships.

Chapter V. Payment Subsystems

Article 17 (Types)

1. The following are payment subsystems of general scope: a) Those that depend on the use of payment instruments necessarily associated with demand deposit accounts, namely checks, debit cards, credit transfers, and direct debits; b) Those that are designated as such by the Bank of Angola due to their potential impact on the Payment System of Angola, according to parameters to be defined in complementary regulation, namely as a result of the number of users, the number of acceptors, or the number and/or value of transactions.
2. Payment subsystems of restricted scope are those that are not of general scope.
3. General scope payment systems are classified by the Bank of Angola, on a case-by-case basis, as payment subsystems of systemic importance or payment subsystems of relevant importance, in accordance with the regulation on clearing houses and payment and settlement subsystems of the Payment System of Angola.
4. General scope payment subsystems covered by paragraph 1.a) of this article are administered by the operator of the Automated Clearing House of Angola. 4.1. Exempt from the provisions of this paragraph is the SPTR – Real-Time Payment System.