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
As many other countries in the region, the Dominican Republic has embarked in the digitalization of payment services, and the social and political climate towards that path has been positive.
The Central Bank of the Dominican Republic’s role in the modernization of payment services has been key. In 2021, the Monetary Board issued the Payments Services Regulation, which regulates the Dominican Republic Payments and Securities Liquidation System (“SIPARD”), administered by the Central Bank of the Dominican Republic, and integrates all payments systems operated by private parties.
The modernization of payment services in the country is attracting new FinTech players to the market, facilitating its development and furthering innovation in the ecosystem.
Legal affairs
Obligations and requirements to provide payment services or ancillary services described above
Entities that provide payment or ancillary services within the SIPARD are required to register with the Dominican Central Bank. The Payments Services Regulation sets forth the obligations and registry requirements that entities such as payments systems administrators, electronic payment entities, electronic payment agents, merchant acquiring businesses, payment aggregators, and administrator of automatic teller machines (“ATM”) network operators.
Depending on the services provided by each specific entity, they may be classified as one, several or none of the ones listed above. Therefore, specific registry requirements will depend on the services to be provided. However, a common requirement is that entities must be incorporated as sole object corporations (in Spanish, sociedad anónima de objeto exclusivo); for example, that the sole commercial purpose of the entity will be the provision of payment aggregator services. Other requirements, such as paid-in capital, minimum reserves, liquidity, risk management and control, etc., are set forth in the Payments Services Regulation.
Other laws generally applicable to service providers like consumer and data protection should also be considered.
If the scope of the services extends to intermediation and banking activities, the monetary and financial law will apply, broadening the legal framework applicable to the entity.
Additional comments regarding the legal situation for payment services or what FinTech’s must be aware of in this business area
Entities that provide payment or ancillary services within the SIPARD are prohibited to offer payment services based on any type of virtual assets.
Economic conditions
Market size for payment services and biggest payment service providers
By the end of 2021, local e-commerce transactions have shown a growth of 120.5% in volume and 99.3% in worth (Dominican Central Bank’s presentation on “The growth of E-Commerce”, dated August 2022). Digital payments (e-transfer and bank issued cards) is on the rise, representing 95% of the volume and 80% of the transactions made between January-October 2021, while checks account fo