Information for payment institutions

Pursuant to section 8 (1) of the Payment Services Oversight Act (Zahlungsdiensteaufsichtsgesetz, ZAG), an institution wishing to provide payment services as a payment institution in Germany, commercially or on a scale which requires a commercially organised business undertaking, needs written authorisation from the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, or BaFin). The same applies for e-money institutions pursuant to section 8a of the Payment Services Oversight Act. Like the Banking Act, the Payment Services Oversight Act recognises two types of institutions: payment institutions and e-money institutions.

Payment services include:

• deposit and withdrawal transactions
• payment transactions
• payment transactions involving the granting of credit
• payment authentication transactions
• digital payment transactions
• money transmission services

In addition, the Payment Services Oversight Act provides for exceptional cases in which payment services are not rendered. The Notice on the granting of authorisation to provide payment services pursuant to section 8 (1) of the Payment Services Oversight Act (Merkblatt über die Erteilung einer Erlaubnis zum Erbringen von Zahlungsdiensten gemäß § 8 Abs. 1 ZAG) (available only in German) contains details on how to obtain authorisation.

Examples of calculating capital requirements according to the different methods specified in the Payment Institutions’ Capital Regulation (Zahlungsinstituts-Eigenkapitalverordnung) can be found under Overview of the calculation methods specified in the Payment Institutions’ Capital Regulation (Zahlungsinstituts-Eigenkapitalverordnung)(available only in German).

E-money business is the issuance of e-money, which is defined as any electronically stored unit of monetary value in the form of a claim on the issuer, issued against payment of a cash amount in order to carry out payment transactions and also accepted by parties other than the issuer. The provision of payment services is included in the licence to conduct e-money business.