Canada    FinTech Guide    Chapter 1    Luxembourg


1. Payment Services / Mobile Payment
Luxembourg  Luxembourg

Luxembourg has well received modern payment services. Indeed, as a globally recognized financial center, with an international reputation, Luxembourg has positioned itself as a world leader in the field of digital financial services and as a financial technology hub.



Legal Affairs


The amended Law of 10 November 2009 on payment services, on the activity of electronic money institution and settlement finality in payment and securities settlement systems and transposing in Luxembourg law the European Directive 2015/2366/EC and repealing the previous Directive 2007/64/EC i.e. the Payment Services Directive II (hereinafter the “ Payment services’ Law”). As for According to article 6 of Payment services’ Law : “No person governed by Luxembourg law other than the payment service providers referred to in article 1 (37) may provide payment services as a payment institution without a written authorization from the Minister in charge of the CSSF (Commission de Surveillance du Secteur Financier – Financial Sector Supervisory Commission)”. Therefore, according to article 7 of the Payment services’ Law, the person under Luxembourg law who may provide payment services as a payment institution must have an agreement from the Minister.

The article 8 of the Payment services’ Law provides for information which are required when submitting the authorization request. Although not considered exhaustive, the following information is required: a programme of operations, setting out in particular the type of payment services envisaged, a 3-year business plan, evidence of the experience of the directors, evidence of the solvency of the shareholders, administrative & infrastructure description, identity of the accounting and external audit, a description of the procedure in place for monitoring, processing and follow-up security incidents and customer complaints related to security, description of the process in place to record, monitor and restrict access to sensitive payment data and keep track of these accesses, a description of the business continuity provisions.

Moreover the applicant shall have an initial capital depending on the activities and its agreement (payment institutions from EUR 20,000 to EUR 125,000).

Notwithstanding the initial capital requirements, payment institutions shall hold, at all times, own funds calculated in accordance with one of the 3 methods as suggested by the Payment services’ Law (article 17).

Costs for getting a license:


  • (a) Flat fees: EUR 15,000 to be paid to the CSSF for the examination of each application;
  • (b) Annual fee : EUR 25,000 to be paid to the CSSF;
  • (c) Annual fee : EUR 10,000 payable by each branch established in Luxembourg by a payment institution governed by the law of a Member State of the European Economic Area (EUR 15,000 for each branch established abroad);
  • (d) Flat fees: EUR 10,000 for each on-the-spot check carried out on a specific subject.


Economic Conditions


10 payments institutions:


  • (a) bitFlyer EUROPE S.A.
  • (b) Bitstamp Europe S.A.,
  • (c) CYBERservices Europe S.A.,
  • (d) eBay S.à r.l.,
  • (e) heidelpay S.A.,
  • (f) Olky Payment Service Provider S.A.,
  • (g) ONPEX S.A.,
  • (h) Payconiq International S.A..,
  • (i) PingPong Europe S.A.,
  • (j) SIX Payment Services (Europe) S.A.

Please kindly note that Paypal (Europe) Sàrl & Cie, S.C.A. is registered as a bank in Luxembourg.



Contributing Authors

Felten & Associes

Bernard Felten
Luxembourg

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Chapter Index:


1. Payment Services / Mobile Payment

2. Asset and Portfolio Management

3. Consulting and Broking Services / Robo-advisory / Auto-trading

4. Trading Platforms / Social Trading Platforms / Signal Following

5. Crowdfunding / Crowdinvesting / Crowdlending

6. Virtual Currency - Bitcoin

7. Loan Services / Factoring / Loan Broking / Finetrading

8. Online Banking Services

9. Analytics and Research / Data Management / Risk Management

10. Accounting

11. Identification

12. Online-pawning

13. InsurTech

14. RegTech

15. Initial Coin Offerings (ICOs)

Disclaimer:
The information in this guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: 1 August 2019