OPERATORS of payment systems will be licensed by the Bulgarian National Bank (BNB), Parliament resolved on March 18, approving the second reading of provisions of the Money Transfers, Electronic Payment Instruments and Payment Systems Bill.
To be licensed, a system operator of a payment system must have a subscribed capital of at least five million leva.
BNB will keep public registers of payment systems, including registers of the operators and the participants in the payment systems. The central bank must inform the European Commission of the operators and participants in payment systems, as well as of the termination of licences for payment system operation. BNB will exercise supervision.
The system operators will be licensed for an indefinite period. The licence is not subject to succession. In certain cases, BNB will be able to revoke a licence.
Other provisions of the new bill establish the use of electronic money (e-money) and other e-payment instruments in Bulgaria.
The European Central Bank defines e-money as "an electronic store of monetary value on a technical device that may be widely used as a prepaid bearer instrument for making payments to undertakings other than the issuer without necessarily involving bank accounts in the transactions".
Under the Bulgarian bill, e-money will be issued only on receipt of funds equalling or exceeding the currency value of the issued e-money. The legal relationship between an issuer and a holder of e-money will be defined in an issue agreement.
Another type of e-payment instruments, called remote access payment instruments, includes bank cards and electronic bank payment orders.
E-payment instruments will be issued by BNB, local commercial banks and branches of foreign banks licensed to issue such instruments, as well as other entities which have the right to issue e-money under legally defined terms and conditions.
The bill is also aimed to regulate trans-border money transfers, an aim that is a priority in Bulgaria. In October 2004, when Parliament was approving the first reading of the bill, Deputy Finance Minister Stamen Tassev said that payments in cash should be limited because they generated corruption and smuggling. However, the bill has no such limitation.
He cited the example of France, where payments of more than 3000 euro between firms must go through banks. Employers are obliged to transfer through banks to their employees any amount of money of more than 1500 euro. According to Tassev, Bulgaria should introduce the same requirement regarding payments of amounts at half this benchmark.