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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
In general, the climate towards modern payment service entities has been increasingly positive. Given the fact that Law No. 20,950 requires these entities to comply with certain standards provided by the Central Bank of Chile (please see below), the financial community has seen its main concern – the lack of financial soundness of the service providers – duly covered, at this stage.
In January 2022 and in order to modernise regulation and facilitate developments and innovations in low-value means of payment, the Central Bank of Chile published a new regulation that authorised the creation and regulated the operation of Clearing Houses for Low-Value Payments (CPBV or Cámaras de compensación para pagos de bajo valor). The new Chapter III.H.6 of the Compendium of Financial Regulations "Authorises the creation and regulates the operation of Low-Value Payment Clearing Houses, in which banking companies or other financial institutions subject to supervision by the Financial Market Commission participate".
Furthermore, according to the XIII Minsait Payments' report on Trends in Means of Payment, Chile is one of the countries where the virtual card penetration is concentrated, where more than 40% of the population declares having at least one card in virtual format.
Legal affairs
Obligations and requirements to provide payment services or ancillary services described above
Law No. 20,950 was enacted allowing companies – other than banks – to function as issuers and operators of payment services with funds handling. Said companies must be incorporated as special purposed stock corporations, subject to open stock corporations' regulation and shall comply with the requirements set forth by the Chilean Central Bank (which may relate in particular to the requirements of paid-in capital, minimum reserves, liquidity, risk management and control, among other matters).
However, if the scope of the services extends to banking activities (i.e. accepting money from the general public on a recurring basis), the entity shall establish itself in Chile as a formal bank or financial institution, also under the oversight of the Commission for the Financial Market (“CMF”, the SEC equivalent) and shall fulfil general banking requirements.
The scope of the services should be carefully analysed on a case-by-case basis in order to assess any potential risks relating to compliance with consumer protection, data privacy and other laws generally applicable to service providers.