Notice No. 07/2017 of November 7, 2017: Payment Systems of Angola - Provision of Payment Services

NOTICE NO. 07/2017 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;

There is a 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 - Law of the Bank of Angola.

I DETERMINE:

Chapter I General Provisions

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

Article 2. (Scope) The present Notice is applicable to providers of electronic payment services and to companies operating payment subsystems.

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Article 3. (Definitions) For the purposes of this Notice, the following are understood: a) Agent: entity contracted by the payment service provider or by the payment subsystem operating company to make services available to users; b) Beneficiary: final recipient of the funds subject to a payment operation; c) Cash in: operations for the purchase of electronic money; d) Cash out: operations for the withdrawal of electronic money; e) Clearing: determination of the balances of payment service providers participating in a payment subsystem, as a result of their respective creditor and debtor positions vis-à-vis others, or of the balances between payment subsystems and/or interoperable payment services; f) Fiduciary account: the bank account opened and held by an Electronic Money Institution, at a Credit Institution, intended exclusively for the receipt of funds resulting from the issuance of electronic money and any interest arising from the remuneration of these funds, the movement of which obeys the conditions provided for in Article 6 of this Notice; g) Payment account: registration account held in the name of one or more users, operated in the execution of payment operations; h) Banking correspondent: legal person that represents and provides services inherent to the activity of the banking financial Institution in facilities not belonging to it, under terms previously agreed between the parties; i) Payment completion: making funds available to the final beneficiary, through credit in their respective payment account or the delivery of cash; j) Payment instruction: request made by a user to their payment service provider requesting the execution of a payment;

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k) Payment instrument: device and/or set of procedures to which the user resorts to issue a payment instruction; l) Interoperability: technical or legal compatibility that allows a subsystem or mechanism to be used together with other subsystems or mechanisms; m) Settlement: the definitive, irrevocable, and unconditional settlement of the payment of fund transfers, carried out through accounting records of debits and credits in the deposit accounts of participants maintained in the books of the Central Bank; n) Brand: sign or set of nominative, figurative, or emblematic signs that allow distinguishing the products or services of a company from other identical or similar ones; o) Electronic money: value stored in an electronic device or system, representing a credit against the issuer and issued after receipt of cash or book money, which allows the user to carry out payment operations with persons other than the issuer; p) Payment operation: act performed by the payer or by the beneficiary, to deposit, transfer, or withdraw funds, regardless of any underlying obligations; q) Payer: natural or legal person holding a payment account and who authorizes a payment operation from that account, or, in the absence of a payment account, the natural or legal person who issues a payment instruction; r) Holder of electronic money: natural or legal person who holds electronic money; s) Payment service provider: Financial Institution authorized by the Bank of Angola to provide payment services; t) Electronic payment service provider: Financial Institution authorized by the Bank of Angola to provide electronic payment services;

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u) 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 refund of electronic money; v) Payment subsystem operating company: Non-banking Financial Institution whose object is the management of infrastructures or central procedures of payment subsystems; w) Payment service providing company: Non-banking Financial Institution authorized to provide payment services under the terms of the Angola Payment System Law and complementary regulation; x) Payment subsystem: set of rules and procedures that applies to the processing and settlement of payment instruments and instructions, in which at least two payment service providers participate; y) Credit transfer: payment instrument by which the payer instructs their respective Banking 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; z) User: natural or legal person who uses a payment service as a payer and/or as a beneficiary; aa) 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 payment instruments on paper support, namely checks, withdrawal orders, and postal orders.

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2. This Notice is not applicable to services regarding payments that, due to their typology, are mandatorily settled on a gross basis in the SPTR – Real-Time Payment System.
3. Furthermore, payment services and subsystems that the Bank of Angola considers do not pose a risk to the normal functioning of payment transactions in the Payment System of Angola may be excluded from the scope of this Notice, taking into account 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 carried out; 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 number are obliged to the duty of information provided for in Article 18 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. (Opening of fiduciary account and deposit of funds)

1. Electronic money institutions must open bank accounts at banking financial institutions in the country for the deposit of funds received in exchange for electronic money, designated as fiduciary account, obeying the limits of Article 7 of this Notice.
2. Electronic money institutions must, in the contracts for the opening of the fiduciary account that they maintain with banking financial institutions, mention in a general way that the holders of electronic money are the legitimate beneficiaries of the funds deposited in that account.

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3. Electronic money institutions must ensure at all times, at a minimum, that the amount of funds deposited in the fiduciary account, minus the amount due to electronic money beneficiaries and the bank commissions and charges associated with the movement of the fiduciary account, is equal to the balance of electronic money held by the holders (unused electronic money).
4. Electronic money institutions must carry out daily accounting reconciliation between the movements of the fiduciary account and the transactions on the electronic money issued.

Article 6. (Movement of the fiduciary account)

1. The fiduciary account is credited with funds received in exchange for electronic money and any interest, and debited as a result of payments to electronic money beneficiaries, refunds to holders of electronic money, and by the bank commissions and charges associated with the movement of the fiduciary account.
2. The bank commissions and charges referred to in the previous number constitute expenses for electronic money institutions, which must provision the fiduciary account with the respective amount at the end of each month.
3. In carrying out payment to electronic money beneficiaries referred to in number 1 of this article, electronic money institutions must prioritize the use of electronic payment instruments, namely electronic transfers.

Article 7. (Limits on the concentration of deposit of funds in fiduciary accounts)

1. Electronic money institutions may deposit the total of funds received from clients in exchange for electronic money in the fiduciary account in a single Banking Financial Institution up to the equivalent of their minimum share capital.

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2. When the funds deposited in the fiduciary account exceed the minimum share capital referred to in the previous number, electronic money institutions must deposit them in more than one Banking Financial Institution up to a limit of 25% (twenty-five percent) in each of these institutions.
3. In exceptional circumstances and upon request by electronic money institutions, duly justified, the Bank of Angola may authorize that they exceed the limit fixed in the previous number under the conditions and deadline it determines.

Article 8. (Payment accounts)

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

Article 9. (Confidentiality of information) The 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 them.

Article 10. (Information to users) In the provision of information regarding accounts and payment instruments, the provisions of number 2 of Article 29 of this Notice apply.

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Chapter III Electronic Money

Article 11. (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 in book money by using a payment instrument debited from a level 1 or level 2 payment account.

Article 12. (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 number 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 banking financial institutions or by 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 point 3.1 of this article must be deposited in banking financial institutions.
4. The resources maintained in payment accounts constitute separate patrimony, which does not confuse with that of the payment service provider.

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Article 13. (Remuneration) The possession of electronic money must not generate any remuneration or benefit, namely in the form of interest.

Article 14. (Refund)

1. The user may request the refund 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 the refund, deadlines equal to or lower than the maximum defined by the Bank of Angola for the carrying out of credit transfers must be ensured. 1.2. In other cases, the refund must be carried out within a maximum deadline of 1 business day.
2. The refund of electronic money may only be subject to commissions, expenses, or other charges if the same are contractually provided for and their value is reasonable and proportional, based on the costs effectively borne by the issuer and not dependent on the value of the refund. 2.1. The refund initiated by the issuer cannot be subject to any commission, expense, or other charges, being carried out for the total monetary value of the electronic money.

Article 15. (Expiry) Balances of electronic money accounts that are not moved for a consecutive period of 15 years revert to the State.

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Chapter IV Payment Service Providers and Payment Subsystem Operating Companies

Article 16. (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) regarding the payment services they propose to provide and 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 number are payment service providers that provide payment services within the scope 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 MSP mentioned in number 1 of this article.
3. Payment subsystem operating companies must monitor and attest to the compliance of the obligations of subsystem participants defined in the MSP.
4. Payment service providers and payment subsystem operating companies must take into consideration the good practices and general principles applicable to their activity, emanating from international reference institutions, namely the BIS - Bank for International Settlements, the WB - World Bank, the ISO – International Organization for Standardization, and the FATF - 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 fully the responsibilities and obligations determined by this Notice and complementary regulation, for the type of intervention applicable.

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Article 17. (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 the payment subsystem operating company that entrusts to third parties the performance of operational functions must safeguard the quality of internal controls.
3. The payment service provider or the payment subsystem operating company assumes the responsibility arising from acts practiced by the subcontracted entities for the performance of functions mentioned in number 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 by 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 18. (Duty of information) Payment service providers and payment subsystem operating companies must send to the Bank of Angola information regarding their respective services, in the periodicity and form that will be defined in specific regulation.

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Article 19. (Adhesion and cancellation)

1. Payment service providers that intend to adhere to a payment subsystem must communicate this fact to the Bank of Angola with a minimum advance 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 of 30 (thirty) days from the date scheduled for the cancellation.
3. The cancellation request must be accompanied by a plan that must contemplate, at a minimum, the following: a) The deadline scheduled for the closure of activities; b) A proposal for communication to users and the general public; c) The mechanisms to be adopted to mitigate potential risks, especially regarding the forms and deadlines for the settlement of pending transactions and the settlement of payment account balances, when applicable.
4. The approval of the cancellation request does not exempt the payment service provider or the payment subsystem operating company from complying with the obligations arising from their assumed contractual relations.

Chapter V. Payment Subsystems

Article 20. (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 the 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 operations.

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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, into payment subsystems of systemic importance or payment subsystems of relevant importance, according to the regulation on clearing houses and payment and settlement subsystems of the Payment System of Angola.
4. The general scope payment subsystems covered by the letter a) of number 1 of this article are administered by the operator of the Automated Clearing House of Angola. 4.1. Exempt from the provisions of this number is the SPTR – Real-Time Payment System, administered by the Bank of Angola.

Article 21. (Administration)

1. Any payment subsystem is administered by a payment subsystem operating company.
2. In the administration and operation of the payment subsystem, the respective operating company must act in a neutral manner, so as not to take advantage of its position to obtain undue competitive advantage for a participant or to prejudice competition between the participants.

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