Palestine Monetary Authority Instructions No. (1) of 2024 Regarding the Instant Payment System

---

[Logo of the Palestine Monetary Authority]

Palestine Monetary Authority

Instructions No. (1) of 2024
Regarding the Instant Payment System

Based on the provisions of Law No. (9) of 2010 concerning Banks, particularly Articles (13, 72) thereof, And based on the provisions of Law No. (41) of 2022 concerning National Payments, particularly Articles (7, 18) thereof, And based on what was approved by the Board of Directors of the Palestine Monetary Authority in its meeting No. (277) dated 2024/07/24, And based on the powers delegated to us, And in pursuit of the public interest, We have issued the following Instructions:

Article (1)
Definitions

The words and phrases appearing in these Instructions shall have the meanings assigned to them below, unless the context indicates otherwise:

• The System: The Instant Payment System managed and operated by the Palestine Monetary Authority, referred to as (iBURAQ).
• The Authority: The Palestine Monetary Authority.
• Direct Member: A member jointly participating in the System and the "Baraq" Real-Time Gross Settlement System.
• Indirect Member: A member participating in the System but not a member of the "Baraq" Real-Time Gross Settlement System.
• Member: All direct and indirect members and other participants in the System.
• Settlement Agent: A member in the "Baraq" system who holds a settlement account and has a contract with an indirect member to manage liquidity operations in their accounts in the System.
• Settlement Account: An account opened in the "Baraq" system by the Direct Member for the purpose of executing internal transfer operations and settling net results of operations in other systems.
• "Baraq" System: The Authority's electronic real-time settlement system, which members will rely on to manage liquidity operations in their accounts in the System.
• Payment and Communication Channels: Electronic tools owned by Members, connected to the System, and used by customers to utilize the System's services.
• Customer: A natural or legal person benefiting from the System's services.
• Natural Person: Individual natural persons benefiting from the System's services.
• Legal Person: Institutions, establishments, companies, stores, and government bodies benefiting from the System's services.
• iBURAQ Account: An electronic record created in the System containing a balance for each Member in each circulating currency, dedicated to recording the value of outgoing and incoming instant payment transactions.
• iBURAQ Settlement Account: An electronic aggregate record specific to the System created in the "Baraq" system, containing the sum of iBURAQ accounts balances for Members, dedicated to executing liquidity management operations, for each currency permitted for trading through the System.
• System Manager: The Payment Systems Management Department in the Payment Systems Directorate at the Palestine Monetary Authority.
• Payment Initiator: A Member in the System who does not hold an iBURAQ account, authorized to issue and send instant payment orders through the System from Members' customers' accounts and to them, based on prior authorization, using the iBURAQ account balance of a Member under a contractual agreement between the two parties.
• Database (Proxy): A central electronic database managed and operated by the Authority, directly connected to the System, containing customer account and electronic wallet data for customers wishing to obtain a secondary identifier.
• Account: The customer's account opened with the Bank or the wallet account opened with a Member Payment Service Company in the System.
• IBAN Account: International Bank Account Number (IBAN).
• Secondary Identifier (Alias): A short identification code representing the customer's account opened with the Member and registered in the central customer database, used exclusively for executing instant payment transactions.
• Account Verification: A service provided via the System, allowing the Sending Member on behalf of the paying customer to send a request to verify the validity of the receiving customer's account data with the Receiving Member before executing the instant payment order.
• Reconciliation File: An electronic record issued by the System containing data of instant payment transactions issued from and received into the iBURAQ account during the day, automatically sent to the Member at the end of the day (00:00).
• Base Balance: The balance that the Member must provide in their iBURAQ account, reflecting the base value transferred on the "Baraq" system, which serves as the reference balance for liquidity management operations.
• Lower Limit: One of the liquidity management controls in the System, which requires exceeding it to top up the iBURAQ account. The top-up operation is performed with the difference between the Base Balance and the actual available balance.
• Upper Limit: One of the liquidity management controls in the System, which allows the Member to withdraw the surplus from the iBURAQ account if exceeded. The withdrawal operation is performed with the difference between the Base Balance and the actual available balance.
• Original Transaction: The instant payment and transfer transaction that was successfully settled for the first time through the System and can be recalled or disputed in accordance with the provisions of these Instructions.

Article (2)
Objective and Scope of Application

1. The provisions of these Instructions aim to regulate membership in the System and determine the rules for executing operations through it.
2. The provisions of these Instructions apply to all Members in the System.

Article (3)
Membership

1. All banks licensed to operate in Palestine must join the System as a Direct Member.
2. All payment service companies licensed to operate in Palestine must join the System as an Indirect Member.
3. Fintech companies or any other entities may join the System membership as a Payment Initiator under conditions subject to the approval of the Authority and its instructions, provided that these entities provide the appropriate technical environment and infrastructure for connection with the System according to the technical specifications issued by the Authority, and successfully pass the inspections and tests approved by the Authority.

Article (4)
Member Obligations

The Member must comply with the following:

1. Provide the services specified and provided by the Authority, and execute instant transfer operations between Members for amounts below the ceilings specified by the Authority exclusively through the System.
2. Provide the appropriate technical environment and infrastructure for connection with the System according to the technical specifications issued by the Authority, and successfully pass the inspections and tests approved by the Authority.
3. Execute operations on the System in accordance with the instructions and guidelines issued by the Authority.
4. Comply with the technical and technical inspection plans and procedures requested by the Authority.
5. Take all measures and precautions to protect data and information security and reduce operational risks.
6. Ensure that the payment and communication channels used to execute operations through the System comply with the provisions of the instructions issued by the Authority.
7. Prepare the available electronic channels, especially the banking application and internet banking, to ensure the display and prominence of the System's code on the main interface of the banking application clearly to customers, showing at a minimum the services provided by the System and providing a service to display fees and commissions to be deducted, if any.
8. Continuously check and monitor the actual available balance in the iBURAQ account in all currencies and take necessary measures to limit the emergence of settlement and liquidity risks.
9. Bear all costs and liabilities arising from their membership in the System.
10. Take all measures to maintain System availability of no less than 99.97% annually.
11. Develop automated supervisory tools that ensure the detection of any events and ensure rapid response in dealing with them.
12. Send outgoing instant payment transactions and receive incoming transactions, including sending and receiving enhancements and notifications, and crediting the paying customer's account or the receiving customer's account within the access time specified by the Authority, which shall not exceed (10) seconds.
13. Submit dispute requests arising between Members and exchange related records and follow up on their settlement.
14. Perform internal reconciliations of outgoing and incoming instant payment transactions based on the Reconciliation File sent automatically via the System daily, and ensure the adequacy of resources, systems, and internal procedures to meet the technical and operational requirements to perform this procedure. The Member is responsible for correcting any discrepancies in transactions that may appear between their system records and the Reconciliation File sent from the System.
15. Include the payment and transfer code in all types of messages used to provide the System's services and stipulated in paragraphs (1), (2), and (6) of Article No. (8) of these Instructions, according to Annex No. (1) attached to these Instructions.

Article (5)
Electronic Records Issued by the System

All electronic records issued by the System are considered valid in all circumstances and serve as a reference for reconciliations among Members.

Article (6)
Permitted Currencies

Until the issuance of a Palestinian currency, the Direct Member must provide the service on the System in the following currencies: Jordanian Dinar, US Dollar, Euro, Shilling, or any other currency that the Authority may permit.

Article (7)
Financial Transactions on the Customer's Account

1. The Member must deduct or hold the value of the financial transaction executed through the System from the customer's account.
2. The Member must record the value of incoming financial transactions to the customer's account immediately.
3. The Member may deduct the commission (transaction fee) value from the customer's account in accordance with the provisions of these Instructions.
4. The Member must limit the reasons for rejecting the financial transaction to the reasons listed in Annex No. (2), with the necessity of clarifying the reason for rejection to the paying customer.

Article (8)
System Services

The System provides the following services:

1. Instant Credit Transfer between bank accounts and electronic wallets opened with Members.
2. Request to Pay (Originated by the Payee).
3. Request for Recall (Recall of Transferred Funds).
4. Account Verification of the Payee before sending the remittance.
5. Transaction Investigation.
6. Payment Initiation through the Payment Initiator.
7. Management of the Customer Database (Proxy) and creation of the Secondary Identifier (Alias).
8. Payment and Transfer using the Secondary Identifier (Alias).

Article (9)
Instant Credit Transfer Service

1. The Member must prepare and provide this service on their available payment and communication channels.
2. The Member must enable the paying customer to execute an instant payment or transfer transaction from their account using the payee's Secondary Identifier or using the customer's IBAN number or wallet number.
3. The Member must not enable legal persons to use the Secondary Identifier when executing instant payment and transfer transactions.
4. The Member must enable the paying customer to request an account verification service for the receiving customer before executing the instant payment and transfer transaction in accordance with the provisions of Article No. (12) of these Instructions.
5. The transfer mechanism for instant payment transactions shall be in the form of individual transactions (Single) or consolidated transactions in one file (Bulk/Batch), subject to compliance with the following:
   a. Enable all customers, both natural and legal persons, to use the transfer mechanism in the form of individual transactions. b. The transfer mechanism in the form of consolidated transactions in one file is limited to customers who are legal persons only, to be executed during the working hours of the "Baraq" system. It may be executed outside the working hours of the "Baraq" system provided that all necessary measures are taken to limit the emergence of any liquidity risks for the paying Member resulting from these remittances.
6. The specifications of the single file for consolidated instant payment and transfer transactions are as follows:
   a. The file size shall not exceed (4) megabytes. b. The number of instant payment and transfer transactions within the file shall not exceed (500) transactions.
   c. All transactions in the single file must be in the same currency.
   d. The amount of a single transaction included in the file shall not exceed the ceiling specified by the Authority. e. The sum of the amounts of all transactions included in the file shall not exceed the ceiling specified by the Authority.
7. Perform the necessary financial entries on customer accounts after sending and receiving all necessary enhancements and notifications in case of success or failure of the transaction execution.

Article (10)
"Request to Pay" Service

1. The Member must prepare and provide this service to customers through their available payment and communication channels.
2. The maximum time limit for the validity of a successfully submitted payment request is (24) hours.
3. The payment request is automatically cancelled through the System after the maximum time limit expires, in case the paying customer does not respond with acceptance or rejection.
4. The Receiving Member (recipient of the payment request) is obliged to forward the request to their paying customer and notify them immediately of the receipt of the request, the amount requested to be paid, and the maximum time limit for responding to the request with acceptance or rejection through their payment and communication channels.
5. In case the paying customer accepts, an instant credit remittance of the same value as the payment request is sent from the paying customer's account to the receiving customer's account (requestor) with all necessary notifications and enhancements.
6. In case the paying customer rejects, the necessary notifications are sent to both parties indicating the failure of the payment request.
7. Partial payment of the transaction value in the incoming payment request is not allowed.
8. The number of payment requests per day for a natural person shall not exceed (5) times, except for transactions rejected by the system.
9. The Member must comply with processing and managing risks arising from providing this service, such that an assessment and analysis of usage operations are conducted and internal controls are established in cooperation with the Authority.

Article (11)
Recall of Transferred Funds Service

1. The Member must provide the service of recalling previously transferred funds to customers through payment and communication channels.
2. The paying customer can submit a request for the service of recalling previously transferred funds successfully through the System within a maximum period of (3) days from the date of execution of the original transaction.
3. A recall request for a partial amount of funds is not allowed; it must be for the full amount transferred in the original transaction.
4. The paying customer is allowed to submit only one successful recall request for the original transaction.
5. The execution of the request depends on the acceptance of the receiving customer of the original transaction and the availability of their balance. In case of their approval, a new instant remittance is issued from the receiving customer's account to the paying customer's account.
6. The fund recall request is automatically cancelled by the system after (1) day from the submission of the request, in case the receiving customer does not respond.
7. The Member must take necessary measures to ensure the misuse of this service is prevented, including analyzing customer behaviors, the number of service requests, and the results of submitted requests.
8. The Member must provide a mechanism that enables the customer to approve or disapprove the completion of the recall request if the currency of the original transaction is different from the account currency when calculating the exchange rate.

Article (12)
Payee Account Verification Service

1. The Member must prepare and provide the payee account verification request service through all payment and communication channels before sending any instant payment or transfer transaction through the System.
2. The Member receiving the payee account verification request is obliged to respond to the request by sending the basic information about the receiving customer's account with them, as specified in Annex No. (3) attached to these Instructions.
3. This service does not produce any financial effect on customer or Member accounts.
4. The Member sending the request for this service must display the minimum information of the receiving customer's account on the payment and communication channels in front of the paying customer, limited to: First Name, Last Name, and Member Name only.
5. The Member may enable the paying customer to create a favorite list of receiving customers, and the customer must not be compelled to create this list to complete instant payment and transfer transactions.
6. The Member requesting verification must not retain or store the data and information resulting from the verification request service in any of their systems after the payment and transfer process ends.
7. The Member must respond to the verification request for all transactions included in the consolidated file individually, even if they are for the same receiving Member.
8. In case the Secondary Identifier is used to execute any instant payment or transfer transaction:
   a. The Member must verify the Secondary Identifier information in the customer database. b. The Member owning the data must update the account status immediately upon any change to it.
   c. Despite the existence of a default account for the customer, the payer is allowed to transfer to another account provided that the existence of the account is verified in the customer database.

Article (13)
Payment Initiation Service

The Member wishing to provide the payment initiation service through the System must comply with the following:

1. Arrange a contractual agreement with the Payment Initiator to authorize them to issue and send payment orders from customer accounts to other Members participating in the System using the Members' iBURAQ account balances.
2. Register and define the Payment Initiator in the System and link it with the Member in accordance with the provisions of Article No. (3) of these Instructions.
3. The Payment Initiator must be a legal person licensed to operate in Palestine by the competent authorities.
4. The Payment Initiator must obtain prior authorization from customers to issue payment orders to transfer from their accounts to other customers' accounts with other Members.
5. Prior approval from the Authority is required for any contractual agreement between the Payment Initiator and the Member.

Article (14)
Customer Database

The Member must execute customer database management operations as follows:

1. The process of registering customer account data in the database is limited to customers who are natural persons only.
2. Based on the customer's prior consent, the Member registers and uploads customer account data according to Annex No. (4) attached to these Instructions and updates it when necessary and deletes it upon the customer's request, thereby considering the Member the owner of the customer data and responsible for it.
3. Upload and register customer data based on their request and consent to display the minimum account information when performing the inquiry process, as specified in paragraph No. (5) of Article No. (15) of these Instructions, and this is done individually for each customer or collectively for a group of customers.
4. Provide the possibility for the customer to determine the primary account in case of multiple accounts or wallets linked to a specific secondary identifier, enabling the customer to change this in the future.
5. Create the Secondary Identifier for the customer's account and provide it to the customer.

Article (15)
Secondary Identifier

1. The Member must create the Secondary Identifier for the customer's account/accounts registered in the customer database, limited to customers who are natural persons only, and apply the two-factor authentication mechanism using a One-Time Password (OTP).
2. The Secondary Identifier is used exclusively by natural persons for executing instant payment and transfer transactions through the System.
3. The content of the Secondary Identifier is uniform among all Members and all customers, which is: Local or International Mobile Phone Number, and consists as follows:
   a. The local mobile phone number consists of (10) digits in the following format: 05XX123456 b. The international mobile phone number consists of a maximum of (20) digits in the following format: 009625X1234567
4. All accounts linked to it and registered in the database are displayed when inquiring about the Secondary Identifier, and the customer can choose the account to which the transfer is to be made.
5. The results of the inquiry about the Secondary Identifier must display the minimum information of the receiving customer as follows: Member Name, Currency Code, Account Type.

Article (16)
Interoperability and Electronic Payment and Communication Channels

The Member must achieve interoperability and connection with the System and with all other Members connected to the System without exception, and this interoperability is achieved using the ISO 20022 international standard in creating and exchanging messages between the System and Members, by preparing and providing electronic channels connected to the System and interoperable with other systems, making them available to customers around the clock, including the following:

1. Members' applications available for access via smart devices.
2. Members' websites available for access via the internet.
3. ATMs of acquiring Members.
4. POS terminals of acquiring Members.
5. E-commerce.
6. Bank branch or office.

Article (17)
System Working Hours

1. The System operates around the clock, all days of the week, and all days of the year on a (24x7x365) basis, where all transactions flowing through the System during these times are settled instantly.
2. A window is created in the System to manage liquidity in the iBURAQ account in all currencies, compatible with the working hours of the "Baraq" system.
3. The Authority determines the time limits for the start and end of the liquidity management window in the iBURAQ account, and the Authority may change and modify these times as it deems appropriate.
4. The Authority communicates to all Members regarding the liquidity management window times.
5. All Members must prepare their instant payment systems so that the next day is opened at (00:00) in accordance with the System.

Article (18)
System Operations

The System performs the following operations every working day:

1. Automatically open the day at (00:00).
2. Receive instant payment and transfer transactions from Members and subject them to instantaneous system inspection rules.
3. Pass transactions to Members after successfully passing the system inspection rules.
4. Execute instant settlement on transactions by deducting the transaction value from the paying Member's iBURAQ account and crediting its value to the receiving Member's iBURAQ account.
5. Create and send necessary notifications and enhancements instantly to Members after the success or failure of the transaction.
6. Calculate variable fees imposed on Members according to instructions issued by the Authority.
7. Continuously check the available balance in the Member's iBURAQ account and compare it with the previously determined Lower Limit and Upper Limit values, and execute liquidity management operations for that account (top-up or withdrawal) automatically via interoperability with the "Baraq" system.
8. Issue the electronic Reconciliation File to the Member at (00:00), containing the sum of values of outgoing and incoming transactions executed through the System during the previous day.

Article (19)
Liquidity Management in the System

1. An account is opened in the System for each Member in each currency, and this account is called: "iBURAQ Account".
2. Three levels for the Member's balance in the System are determined: Base Balance, Upper Limit, and Lower Limit.
3. The Authority determines the value of each balance for the levels mentioned in paragraph (2) of this Article based on the volume of the Member's operations and in coordination with them.
4. The Member is responsible for managing liquidity in their iBURAQ accounts in the System during the working hours of the "Baraq" system, as well as limiting the emergence of liquidity risks, especially outside the working hours of the "Baraq" system.
5. The System automatically and continuously checks the actual available balance in the Members' iBURAQ accounts and compares it with the previously determined Lower Limit and Upper Limit values, and sends a notification to the Member if their balance exceeds any of the above limits.
6. Within the working hours of the "Baraq" system and at specific times within the liquidity management window, liquidity management operations for Direct Members are executed automatically (top-up or withdrawal of surplus).
7. The Indirect Member is responsible for following up with the Direct Member (Settlement Agent) to ensure the execution of liquidity management operations and authorize the Authority to take the appropriate action.
8. Outside the working hours of the "Baraq" system, the System provides a mechanism for emergency liquidity management in the Member's iBURAQ account, provided that the System Manager is authorized by the Member to execute the operation on their behalf according to the following determinations:
   a. Emergency liquidity management is limited to performing a top-up (Fund) operation for the iBURAQ account only. b. The Direct Member must provide the System Manager with a request to top up their iBURAQ account according to Annex No. (5) attached to these Instructions.
   c. The Settlement Agent must provide the System Manager with a request to top up the iBURAQ account of the Indirect Member contracted with them according to Annex No. (5) attached to these Instructions.
   d. The value of the emergency top-up is financially settled on the Direct Member's settlement account in the "Baraq" system on the next working day. e. In exceptional circumstances, the Member may request top-up from the System Manager via telephone and email, provided that a signed authorization request is provided to the System Manager at the beginning of the next working day.

Article (20)
Disputes Between Members

1. The Authority provides a dedicated interface for managing disputes through the central System.
2. The Member may submit a dispute request on behalf of their customer through the System within a maximum period of (15) working days from the date of execution of the original transaction.
3. The Member may respond by rejecting the incoming request if the time limit specified in paragraph No. (1) of this Article is exceeded.
4. The Member must respond to the incoming dispute using the means provided by the System, enhanced with the reference number and any related documents and information if requested.
5. The period available to respond to the incoming dispute with acceptance or rejection is within a maximum period of (10) working days from the date of submission of the dispute, and the receiving Member may accept or reject the submitted response if this specified period is exceeded.
6. The Member sending the dispute request must credit the refunded amount to their customer's account within a maximum of (2) working days from the date of acceptance of the dispute they submitted.
7. In case the dispute between the parties is not settled through the System's procedures, any of the related Member parties has the right to request transferring the dispute to a special technical arbitration committee formed by the Authority within a maximum period of (30) days from the date of submission of the dispute.
8. The arbitration results are final, accepted, and not subject to appeal.

Article (21)
Ceilings for Payment and Transfer Operations

1. The Authority determines the ceilings for instant payment and transfer operations permitted through the System by issuing a circular from it.
2. The Member must not set any other ceilings for payment and transfer operations, whether incoming or outgoing, other than those specified by the Authority.

Article (22)
System Fees and Services Provided Through It

1. The fixed and variable system fees collected from Members on behalf of the Authority are free during the first year of the System's launch.
2. The system service fees at Members, which are collected from customers, are free during the first year of the System's launch.
3. The Authority will issue instructions regarding fees and commissions later.

Article (23)
Financial Guarantees for the Indirect Member

The Indirect Member must comply with the following:

1. Sign an agreement with a Direct Member to be a Settlement Agent for them in the "Baraq" system and provide that agreement to the Authority.
2. Notify the Authority in writing and before (30) days in case of stopping or canceling the agreement mentioned in paragraph (1) of this Article.
3. Provide bank guarantees issued by the contracted Member, in which they commit and authorize the Authority to execute settlement on their accounts in the "Baraq" system unconditionally and irrevocably by restricting the Indirect Member's obligations in the System resulting from executing settlement on their accounts in the "Baraq" system.

Article (24)
System Logo

1. The ownership of the System logo belongs exclusively to the Authority, as shown in the drawing below:
   [iBURAQ Logo]
2. The Member may use this logo for advertising and promotional purposes, and the Member must display it on various electronic payment and communication channels.
3. The design of this logo must comply with the technical and formal standards specified for it and issued by the Authority, as stipulated in Annex No. (6) attached to these Instructions.
4. The Member is prohibited from advertising in a misleading or deceptive manner using this logo.

Article (25)
Business Continuity Procedures

In addition to what is stipulated in the Authority's Instructions No. (5) of 2022 concerning Business Continuity Management, all Members must comply with the following:

1. Achieve System availability around the clock (24/7), and take all necessary measures to continue System operation when it is necessary to perform any programs or maintenance, upgrade, or update work.
2. In case of a sudden and unexpected event of disconnection and interoperability with the System or the occurrence of any event that may lead to the suspension of outgoing and incoming instant payment services, the Member must immediately inform the Authority of the event and take corrective measures immediately and urgently, on

---