Name
Global FinTech Guide
Country _ Name
Czech Republic
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

The Czech Republic (“Czechia”) has always been a “FinTech-friendly” country, especially when it comes to payment services. 

One example of the Czechs’ inclination towards new technologies could be retail payments. Based on the published statistical data, already in 2020, more than half (54%) of the retail transactions were cashless, with a presumed further decrease in cash payments in 2021 (also due to the corona pandemic). Furthermore, contactless payments have always been very popular in Czechia, and 2021 was no different. According to information published by Mastercard, in 2021, approx. (i) 98% of payment cards distributed in Czechia allowed contactless payments, and (ii) 96% of retail payments were contactless (initiated either by card, smartphone, or wearable). This trend also affects the acquirers' side, as 93% of retailers already accept contactless payments. The corona pandemic has also led to an increased usage of 'Buy Now, Pay Later' payment solutions in e-commerce (in Czechia offered e.g. by Twisto or Equa bank) or QR code payments in restaurants (Qerko).

The described approach of Czechia somewhat resembles that of the Czech National Bank (‘CNB’) – i.e. the Czech regulator overseeing the provision of financial services – which e.g. pro-actively decided to create a new communication channel explicitly dedicated to financial innovations to receive inquiries from all financial market participants.

Legal affairs

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

In the Czech Republic, payment services are regulated in the Payment Services Act (Zákon o platebních službách – “ZPS"). In addition to the ZPS, anti-money laundering and data protection regulations must also be complied with.

According to the ZPS, a license is required to provide payment services as a business activity, unless any of the exclusions applies. These exclusions correspond with those laid down by the Second Payment Services Directive.

The ZPS presumes five types of licenses, each of them covering different types or different scope of payment services, i.e.:

  • payment institution license – depending on the scope of the license, the payment institution may provide all types of payment services without any limitations, however, it cannot issue electronic money;
  • e-money institution license – depending on the scope of the license, the e-money institution may provide all types of payment services without any limitations and it may also issue electronic money;
  • small-scale payment services provider license – depending on the scope of the license, small-scale payment services provider may provide all types of payment services except for payment account information service or payment initiation service and there is also a limit imposed on the average amount of payment transactions made in one month (EUR 3 mil.);
  • small-scale electronic money issu

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