Name
Global FinTech Guide
Country _ Name
Albania
SectionTitle
Payment services
Body
FinTechs belonging to this category offer alternative payment services which are supposed to provide a faster and cheaper way for national, European, and international payments for private and business customers by using new technologies.

For example, payment service providers hereby offer solutions to easily integrate several payment services in online shops.

Some FinTechs furthermore provide real cash register systems and online-reservation solutions for restaurants and shops providing their own payment services or making use of the payment services of FinTechs described above.

Introduction

Attitude of the country towards modern payment services

World Bank studies show that the Albanian economy is characterised by a high use of cash. However, the adoption of a new law on payments services in no. 55/2020 (PS Law) has wielded a notable impact; influencing and encouraging the use of modern payment instruments. Furthermore, the use of modern payment instruments is fostered by national authorities through organizing campaigns aimed at enhancing opportunities for accessing payment accounts.

With the aim of promoting and encouraging the utilization of modern payment instruments in accordance with international standards, Albania persists in adopting legal norms that conform to EU legislation. Namely, on 14 December 2023, the Albanian Parliament adopted law no. 100/2023 “On payment accounts with basic features”, which is partially aligned with Directive 2014/92/EU on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features, ensuring the right of access to a payment account with basic features for consumers, as an essential means to facilitate consumer participation in the financial market, based on their interest in having such an account, which will enable them to receive the

benefits brought by the financial market. Currently, the payment accounts with basic features are provided only in the Albanian currency (i.e., Albanian Lek – “ALL”).
The main objectives of the PS Law in the country are three (3): promoting competition and creating innovative financial services; better consumer protection; and expansion of the representation of institutions providing payment services throughout the territory of the Republic of Albania.

The benefits anticipated from the PS Law, are the following –

  • positive impact on the country's EU integration process, due to easier integration with the Single Euro Payment Area.
  • promoting and expanding the financial inclusion of the population.
  • increasing competition between operators in the market by reducing the costs of the services.
  • encouraging the wider use of electronic payment instruments by reducing the use of cash in the economy.
  • promoting higher transparency through real-time information and enabling better consumer protection.
  • enabling payment institutions to provide services that to date have been the prerogative of the banking sector.
Having said the above, considering that a part of the Albanian economy is still informal, the cash economy is still flourishing, and therefore, the full integration of the payment system will take time.



Legal affairs

Obligations and requirements to provide payment services or ancillary services described above

The payment services are covered by the Law on Payment Services no. 55/2020 which has approximated the PSD2 directive in Albania and relevant bylaws. Under the PS Law, the payment service activity may be performed only after obtaining a license issued by the central Bank of Albania (BoA).

The services that fall within the scope of the PS Law are the following:

  • Services enabling cash to be placed on a payment account as well as all the operations required for operating a payment account.
  • Services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account.
  • Execution of payment transactions, including transfers of funds on a payment account with the user's payment service provider or with another payment service provider:
    • execution of direct debits, including one-off direct debits;
    • execution of payment transactions through a payment card or a similar device; and
    • execution of credit transfers, including standing orders.
  • Execution of payment transactions where the funds are covered by a credit line for a payment service user:
    • execution of direct debits, including one-off direct debits;
    • execution of payment transactions through a payment card or a similar device; and
    • execution of credit transfers, including standing orders.
  • Issuing of payment instruments and/or acquiring of payment transactions.
  • Money remittance.
  • Payment initiation services.
  • Account information services
The licensing application undergoes through BoA and includes inter alia a description of the activity sought to be carried out, a business plan including a forecast budget calculation for the first three (3) financial years, evidence of the minimum initial capital, description of the applicant's governance arrangements and internal control mechanisms etc.

Registration costs include a fee to be paid to the BoA amounting to approximately EUR 300, without including costs for translation services for the documents required from the BoA, lawyers', and financial advisors' costs for preparation of these documents which are computed case by case. Minimum capital requirements for a payment institution in Albania are from approx. EUR 25,000 to approx. EUR 450,000 depending on the type of payment services covered by the license.

Additional comments regarding the legal situation for payment services or what FinTech’s must be aware of in this business area

N/A


Economic conditions

Market size for payment services and biggest payment service providers
The new law on payment services provides a favorable environment for conducting business in this direction, attracting a considerable number of interested entities. Currently, there are 10 electronic money institutions licensed from the Bank of Albania (BoA). Based on the data published by BoA, the number and value of electronic transactions have been experiencing a significant increase in recent years. In 2022, the number of electronic transactions reached 11,2 million, marking a 61% increase compared to the previous year. In 2023, the number of electronic transactions reached a peak of 14 million, with a reported total value of ALL 91.6 billion (approximately EUR 916 million).

Additional comments regarding the economic situation for payment services or what FinTech’s must be aware of in this business area

N/A

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