Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 137/2019

SUBJECT: FINANCIAL ENTITIES MANAGEMENT – APPROVES THE NEW REGULATION ON PAYMENT SERVICES, ELECTRONIC PAYMENT INSTRUMENTS, CLEARING AND SETTLEMENT.

VISTOS (SEEING):

The Political Constitution of the State of February 7, 2009.
Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia.
Law No. 164 of August 8, 2011, on Telecommunications, Information and Communication Technologies.
Law No. 393 of August 5, 2013, on Financial Services.
Law No. 1206 of August 5, 2019, “Law on Modifications to the General State Budget – Management 2019.”
The Statute of the BCB, approved by Board Resolution No. 128/2005 of October 21, 2005, and its subsequent modifications.
The Regulation on Payment Services, Electronic Payment Instruments, Clearing and Settlement approved by Board Resolution No. 134/2015 of July 28, 2015, and its subsequent modifications.
The Report from the Financial Entities Management BCB-GEF-SSPSF-DVSP-INF-2019-59 of October 4, 2019.
The Report from the Legal Affairs Management BCB-GAL-SANO-DLBCI-INF-2019-305 of October 7, 2019.

CONSIDERANDO (CONSIDERING):

That the Political Constitution of the State establishes in its article 327 that the BCB is a public law institution, with legal personality and its own assets. Within the framework of the State's economic policy, it is the function of the BCB to maintain the stability of the internal purchasing power of the currency, to contribute to economic and social development.
That in its article 328 it establishes that it is an attribution of the BCB, in coordination with the economic policy determined by the Executive Branch, in addition to those indicated by Law, to regulate the payment system.

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That according to article 331 of the Constitutional Text, financial intermediation activities, the provision of financial services, and any other activity related to the handling, use, and investment of savings, are of public interest and can only be exercised with prior authorization from the State, in accordance with the Law.
That articles 3 and 30 of Law No. 1670 provide that the BCB will formulate policies of general application in monetary, exchange, and payment system matters for the fulfillment of its objective, with all financial intermediation and financial service entities whose operation is authorized by the Financial System Supervision Authority being subject to its regulatory competence.
That in its article 44 it establishes that the highest authority of the BCB is its Board of Directors, which is responsible for defining its policies, specialized regulations of general application, and internal norms; as well as for establishing administrative, operational, and financial strategies of the BCB, approving their respective short and medium-term programs.
That in subsections a), b), and o) of its article 54, it provides that the BCB Board of Directors has the authority to issue norms and adopt general decisions that are necessary for the BCB to fulfill its functions, competencies, and powers assigned by Law; to regulate the administration of payment systems among authorized financial entities; and to approve, modify, and interpret the Statute and Regulations of the BCB by two-thirds of the votes of all its members, without the need for any additional administrative act.
That article 78 of Law No. 164 on Telecommunications, Information and Communication Technologies establishes that the act or legal transaction carried out by a natural or legal person in a digital document and approved by the parties through digital signature, concluded electronically and by other more technologically advanced means; the electronic data message and the digital signature, have legal and evidentiary validity.
That paragraph III of article 8 of Law No. 393 on Financial Services establishes that the Financial System Supervision Authority will issue specific regulation and supervise its compliance within the framework of the regulation issued by the BCB, in the scope of the payment system.
That paragraphs I and IV of its article 124 provide that operations carried out within the framework of the services provided by financial entities may be carried out through electronic means, which necessarily must comply with security measures that guarantee integrity, confidentiality, authentication, and non-repudiation; and that the ASFI and the BCB, according to their competencies, will issue regulation establishing the procedure and security norms for operations, as well as the minimum requirements that entities must meet to carry out activities of electronic banking, telephone banking, and through mobile devices, regulatory compliance norms mandatory for financial entities providing the service.

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That the fourth additional provision of Law No. 1206 on Modifications to the General State Budget – Management 2019, modifies article 359 of Law No. 393 on Financial Services, to clarify that the operations and services that Electronic Card Management Companies can provide extend to both natural or legal persons, public or private.
That numeral 13 of article 11 of the Statute of the Central Bank of Bolivia establishes as an attribution of the Board of Directors of the Issuing Entity, to approve the norms for the functioning of the payment system.
That the Regulation on Payment Services, Electronic Payment Instruments, Clearing and Settlement aims to regulate, within the scope of the national payment system, the services and electronic payment instruments and the clearing and settlement derived from these instruments; to establish the general framework for the creation, constitution, and functioning of Clearing and Settlement Chambers and Payment Service Companies-PSC; and to regulate the surveillance and supervision activities of the national payment system.
That the Report from the Financial Entities Management indicates that it is necessary to issue a new version of the Regulation on Payment Services, Electronic Payment Instruments, Clearing and Settlement to facilitate the adoption and operation of technological innovations in the provision of services and payment instruments; and to include all modifications made since its issuance in 2015, in addition to current modifications to have an ordered normative text.
That the Report from the Legal Affairs Management concludes that the approval of the new Regulation on Payment Services, Electronic Payment Instruments, Clearing and Settlement, does not contravene the current legal order, therefore it is legally procedent.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Approve the New Regulation on Payment Services, Electronic Payment Instruments, Clearing and Settlement in its V Titles and 68 Articles, which, as an annex, form part of this Resolution, with effect from the date of approval.

Article 2.- Repeal, from the entry into force of this Resolution, Board Resolutions No. 134/2015 of July 28, 2015, No. 166/2015 of September 1, 2015, and No. 071/2017 of May 23, 2017.

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Article 3.- Send to the Financial System Supervision Authority the new Regulation on Payment Services, Electronic Payment Instruments, Clearing and Settlement approved, in application of the provisions contained in article 8 of Law No. 393 on Financial Services, for the purpose that said entity adapts its specific regulation.

Article 4.- The Presidency and General Management are charged with the execution and compliance of this Resolution.

La Paz, October 8, 2019

Pablo Ramos Sánchez
Gabriel Herbas Camacho
Sergio Velarde Vera
Abraham Pérez Alandia
Ronald Polo Rivero
Luis Baudoin Olea

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ANNEX

REGULATION ON PAYMENT SERVICES, ELECTRONIC PAYMENT INSTRUMENTS, CLEARING AND SETTLEMENT

TITLE I

GENERAL PROVISIONS

Article 1 (Object). This Regulation has the following objectives:

I. To regulate, within the scope of the national payment system, the services and Electronic Payment Instruments-EPI and the clearing and settlement derived from these instruments.

II. To establish the general framework for the creation, constitution, and functioning of Clearing and Settlement Chambers and Payment Service Companies-PSC.

III. To regulate the surveillance and supervision activities of the national payment system.

Article 2 (Scope of Application). The norms contained in this Regulation are applicable to:

a) Financial Intermediation Entities-FIE that have a license to operate from the Financial System Supervision Authority-ASFI.

b) Payment Service Companies-PSC established in this Regulation and their participants.

c) Clearing and Settlement Chambers and their participants.

d) Securities Depository Entities and their participants.

e) Entities carrying out settlement activities, indicated in this Regulation.

f) Holders and users of Electronic Payment Instruments-EPI and natural and legal persons who accept them.

g) Investment Fund Management Companies-IFMC.

Article 3 (Definitions). For the purposes of this Regulation, the following definitions are established:

a) Administration of Electronic Payment Instruments-EPI: Service provided by the issuer of an Electronic Payment Instrument-EPI and/or a Payment Service Company-PSC consisting of the activities developed for the processing of Payment Orders-PO and their operation, such as: the issuance of Electronic Payment Instruments-EPI, provision of technology, terminals or electronic devices, security mechanisms, communication management, elaboration and dissemination of procedures, and other accessory activities.

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b) Acquiring: Contract through which a Financial Intermediation Entity-FIE or a Payment Service Company-PSC, authorized by the Financial System Supervision Authority-ASFI, provides electronic means and affiliates natural and/or legal persons to process Payment Orders-PO made through Electronic Payment Instruments-EPI.

c) Acquirer: Entity authorized by the Financial System Supervision Authority-ASFI that performs acquiring and is responsible for the management of Payment Order-PO information and the settlement of these with accepting entities.

d) Beneficiary: Natural or legal person who receives in their account funds coming from a Payment Order-PO.

e) Mobile Wallet: Electronic Payment Instrument-EPI that accredits a contractual relationship between the issuer and the holder of a mobile wallet account, exclusively in national currency, which allows the holder of the instrument to originate electronic fund transfers, load and/or withdraw cash, make inquiries, and other accessory activities.

f) Automated Teller Machines (ATM): Electronic devices that allow, in an illustrative and non-limiting manner, the withdrawal and deposit of cash, electronic fund transfers, redemption of shares in open investment funds, loading of Electronic Payment Instruments-EPI, balance inquiries, password changes, and others. ATMs are also known by their English acronym ATM (Automated Teller Machine).

g) Clearing and Settlement Chamber: Complementary financial services company whose object is the automatic and centralized processing of the clearing and settlement of Payment Orders-PO generated from Payment Instruments-PI and other accessory activities.

h) Mobile wallet distribution channel: Infrastructure that through an electronic fund transfer network, allows the issuance and distribution of the mobile wallet, from the issuer to the account holder and/or beneficiary.

i) Electronic payment channels: These are devices (automated teller machines-ATM, point of sale terminals-POS) or communication networks (internet, fixed or mobile telephony) that allow processing Payment Orders-PO originated with Electronic Payment Instruments-EPI.

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j) Loading of an Electronic Payment Instrument-EPI: Increase of the balance of the account associated with the Electronic Payment Instrument-EPI that allows its holder and/or user to make Payment Orders-PO with this instrument.

k) Check: Payment Instrument-PI that represents an unconditional order to pay at sight drawn by the payer against their funds in a checking account.

l) Cycle: Continuous processing time period of Payment Orders-PO and securities transfer instructions that comprises the clearing and settlement of the Net Multilateral Positions-NMP of participants. The cycle may have sessions.

m) Quick Response Code: Matrix of points or two-dimensional barcode, with a square structure also known as QR by its English acronym (Quick Response Code). In the scope of the payment system, it allows storing encoded data for the processing of electronic fund transfers.

n) Commission: Amount contractually agreed that the issuer of an Electronic Payment Instrument-EPI, Payment Service Company-PSC, financial and non-financial correspondent, or natural or legal person affiliated with an acquirer, receives for the services provided.

o) Clearing: Process that comprises: the transmission, reconciliation, and, where applicable, confirmation of Payment Orders-PO, securities transfer instructions, prior to settlement and the establishment of final or net positions (creditor or debtor) for each participant, which replace the individual rights and obligations of each accepted Payment Order-PO or securities transfer.

p) Financial correspondent: Financial Intermediation Entity-FIE or complementary financial services company regulated by the Financial System Supervision Authority-ASFI that through an express contract commits to carry out or provide payment services for a determined time on behalf of another Financial Intermediation Entity-FIE or Payment Service Company-PSC, in exchange for a previously agreed commission.

q) Non-financial correspondent: Natural or legal person who by virtue of an express mandate commits to carry out or provide payment services for a determined time on behalf of a Financial Intermediation Entity-FIE or Payment Service Company-PSC, in exchange for a previously agreed commission.

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r) Account associated with an Electronic Payment Instrument-EPI: Account used to originate a Payment Order-PO, which can be a checking account, savings account, mobile wallet account, and those that allow the use of credit and prepaid cards. These accounts may be linked to a cell phone number or email address for the processing of Payment Orders-PO.

s) Mobile wallet account: Payment account issued in the name of a holder, associated with the Electronic Payment Instrument-EPI mobile wallet, exclusively in national currency.

t) Savings account: Account that allows natural or legal persons to keep funds in Financial Intermediation Entities-FIE destined for savings, on which they can originate Payment Orders-PO.

u) Checking account: Account that allows natural or legal persons to keep funds in banking entities mainly to make payments through Payment Orders-PO or checks.

v) Checking and Reserve Account: Account opened at the Central Bank of Bolivia-BCB by banking entities to constitute the legal reserve and to instruct and receive Payment Orders-PO.

w) Reserve Account: Account opened at the Central Bank of Bolivia-BCB by Savings and Credit Cooperatives, Housing Financial Entities, and Development Financial Institutions to constitute the legal reserve and to instruct and receive Payment Orders-PO.

x) Settlement Account: Account opened at the Central Bank of Bolivia-BCB by participants of the Integrated Payment Settlement System-LIP to process Payment Orders-PO in that system. The following are considered settlement accounts:

checking and reserve accounts,
reserve accounts,
clearing accounts, and
settlement accounts opened by the Central Bank of Bolivia-BCB for other entities covered by the Regulation of the Integrated Payment Settlement System-LIP.

y) Payment Account: Account issued in the name of a holder, associated with the Electronic Payment Instrument-EPI mobile wallet or prepaid card. The funds held in these accounts are not deposits, therefore they do not generate interest.

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z) Clearing Account: Account opened at the Central Bank of Bolivia-BCB by Clearing Chambers and Securities Depository Entities for the settlement of Net Multilateral Positions-NMP resulting from the clearing of Payment Instruments-PI and securities. These accounts cannot maintain balances at the end of the cycle.

aa) Automatic debit from account: Charge to the account of the ordering party, previously authorized by them, initiated by the beneficiary.

bb) Software developments: Specialized computer programming for the issuance and/or administration of Electronic Payment Instruments-EPI and Payment Orders-PO that must comply with the norms and procedures established by the supervision and surveillance bodies.

cc) Electronic Money: Monetary value used to process or receive Payment Orders-PO through different Electronic Payment Instruments-EPI and is convertible into cash at nominal value at the request of the holder.

dd) Cash-out of Electronic Payment Instrument-EPI: Act by which an authorized entity delivers cash to the holder or user of the Electronic Payment Instrument-EPI charged to the associated account.

ee) Cash-out of Electronic Payment Instruments-EPI in stores: Procedure by which the holder of an Electronic Payment Instrument-EPI can withdraw cash from the account associated with said instrument in stores affiliated with the Electronic Payment Instrument-EPI network at the time of making a purchase and paying at a Point of Sale Terminal-POS or some payment channel established in this Regulation, subject to specific regulation issued by the Central Bank of Bolivia-BCB and the Financial System Supervision Authority-ASFI.

ff) Cash: Legal tender banknotes and coins.

gg) Issuance of Electronic Payment Instrument-EPI: Action by which a Financial Intermediation Entity-FIE or Payment Service Company-PSC authorized by the Financial System Supervision Authority-ASFI, as well as the Investment Fund Management Company-IFMC that manages Authorized Open Investment Funds authorized by the Financial System Supervision Authority-ASFI and duly registered in the Securities Market Registry, delivers to a holder or user an Electronic Payment Instrument-EPI.

hh) Issuer of Electronic Payment Instruments-EPI: Financial Intermediation Entity-FIE or Payment Service Company-PSC authorized

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by the Financial System Supervision Authority-ASFI, as well as the Investment Fund Management Company-IFMC that manages Authorized Open Investment Funds authorized by the Financial System Supervision Authority-ASFI and duly registered in the Securities Market Registry, which in the development of its activity issues one or more Electronic Payment Instruments-EPI. The issuer is obligated to pay obligations generated by the use of the Electronic Payment Instrument-EPI.

ii) Payment Service Companies-PSC: Complementary financial services companies authorized by the Financial System Supervision Authority-ASFI to provide the payment services contemplated in this Regulation.

jj) Accepting Entity: Any natural or legal person, public or private, that accepts on its own behalf or on behalf of third parties Payment Orders-PO originated with one or more Electronic Payment Instruments-EPI for payment of goods, services, and/or any other liquid and due obligation through Electronic Payment Instruments-EPI.

kk) Securities Depository Entity: Anonymous company of exclusive object authorized by the Financial System Supervision Authority-ASFI and inscribed in the Securities Market Registry, in charge of the custody, registration, and administration of securities as well as the settlement and clearing of operations carried out with the securities object of custody.

ll) Settlement Entity: Entity with an account at the Central Bank of Bolivia-BCB that assumes the responsibility of providing the necessary funds for the settlement of Net Multilateral Positions-NMP of participants of a Clearing and Settlement Chamber, Payment Service Company-PSC, or Securities Depository Entity that does not have a settlement account at the Central Bank of Bolivia-BCB. The settlement entity must be a participant of the Integrated Payment Settlement System-LIP, Clearing and Settlement Chambers, Payment Service Companies-PSC, or Securities Depository Entities.

mm) Due: Characteristic by which Payment Orders-PO originated and accepted must be settled or paid.

nn) Settlement Guarantees: Mechanisms to ensure the settlement of Payment Orders-PO and/or securities. Clearing and Settlement Chambers, Securities Depository Entities, or Payment Service Companies-PSC will define the guarantees to be used within the framework of what is established in this Regulation.

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oo) Monetary Guarantee: Deposit of a Payment Service Company-PSC that backs the settlement of its operations.

pp) National Transfer: Electronic fund transfer in national territory for payment in cash, with the particularity that the ordering party and/or the beneficiary do not maintain an account associated with the Electronic Payment Instrument-EPI in the service-providing entities.

qq) Payment Instruments-PI: Physical or electronic forms or modalities that money takes and that allow a holder and/or user to transfer funds or execute Payment Orders-PO. The following are Payment Instruments-PI:

Cash
Check
Electronic Fund Transfer Order-EFTO
Mobile Wallet
Electronic cards (credit, debit, and prepaid)
Others authorized by the BCB Board of Directors.

rr) Electronic Payment Instrument-EPI: Electronic device or document that can be used physically or virtually and allows the holder and/or user to originate Payment Orders-PO and/or make inquiries of accounts associated with the instrument. The Electronic Payment Instruments-EPI are: