1. 1 Expert Mission on Electronic Payments Legal environment for cashless operations in Poland Adam Janiszewski TAIEX mission in Baku 5-7 May 2015

2. 2 Legal environment for cashless operations - legislation arising from the EU law (1) Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive 97/5/EC (PSD). Directive 2009/110/EC of the European Parliament and of the Council of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutions amending Directives 2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC (EMI). Regulation of the European Parliament and of the Council on interchange fees for card-based payment transactions (MIF). Directive 2014/92/EU of the European Parliament and of the Council of 23 July 2014 on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features (PAD). Regulation of the European Parliament and of the Council of 14 March 2012 establishing technical and business requirements for credit transfers and direct debits in euroand amending Regulation (EC) No 924/2009.

3. 3 Legal environment for cashless operations - legislation arising from the EU law (2) Directive 2007/64/EC on payment services in the internal market:  The PSD lays down rules concerning transparency of conditions and information requirements for payment services, and the respective rights and obligations of payment service users and payment service providers in relation to the provision of payment services as a regular occupation or business activity.  Annex – list of payment services  Definitions – payment transaction, payment order, payment instrument, direct debit  Sets lighter regime on information and obligations for micropayments (below 30 EUR or 60 EUR).  Implemented in Poland in the Law on Payment Services of 19 August 2011.

4. 4 Legal environment for cashless operations - legislation arising from the EU law (3) PSD ANNEX – list of payment services: 1.Services enabling cash to be placed/cash withdrawals on a payment account as well as all the operations required for operating a payment account. 2.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, execution of credit transfers, including standing orders. 3.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,  execution of credit transfers, including standing orders. 4.Issuing and/or acquiring of payment instruments. 5.Money remittance. 6.Execution of payment transactions where the consent of the payer to execute a payment transaction is given by means of any telecommunication, digital or IT device and the payment is made to the telecommunication, IT system or network operator, acting only as an intermediary between the payment service user and the supplier of the goods and services.

5. 5 Legal environment for cashless operations - legislation arising from the EU law (4) Directive 2009/110/EC on the taking up, pursuit and prudential supervision of the business of electronic money institutions (EMI).  EMI lays down rules for authorization, operation and supervision of electronic money institutions.  EMI lays down rules for issuing, distribution, trade and redeemability of electronic money.  Definition of electronic money - electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions as defined in PSD, and which is accepted by a natural or legal person other than the electronic money issuer.  Implemented in Poland in the Law on Payment Services of 19 August 2011.

6. 6 Legal environment for cashless operations - legislation arising from the EU law (5) Regulation of the European Parliament and of the Council on interchange fees for card-based payment transactions. Proposal – adopted by European Parliament (III 2015) need to be adopted the European Council (by July 2015). Interchange Fees are multilaterally agreed fees payable between the Payment Service Providers (PSPs) of the payer/consumer and of the payee/merchant. Regulation will cap interchange fees at 0.2% of the transaction value for consumer debit cards and at 0.3% for consumer credit cards. For consumer debit cards, it also gives flexibility to Member States to define lower percentage caps and impose maximum fee amounts. Regulation also increases transparency on fees and will enhance competition for payment card schemes and banks by e.g. addressing licensing issues and other conditions that have restricted the freedom of choice of retailers.

7. 7 Legal environment for cashless operations - legislation arising from the EU law (6) The platform is a payment card scheme (four-parties) (Visa, Mastercard.):

8. 8 Legal environment for cashless operations - legislation arising from the EU law (7) Regulation of the European Parliament and of the Council on interchange fees for card-based payment transactions: - similar legal solutions already adopted in Poland. Situation of interchange fees in Poland up to 30.08. 2013 (for DC 1,6%, for CC 1,5% - EU average 0,7% and 0,84%.) National Bank of Poland – assessment study 2007 Works in the Polish Parliament (2011) – proposal to regulate it by the market. NBP – Council for development of Payments – creation of WG with market participants. Failure of regulating the issue by the market itself (2012-2013) Adoption (2013) by Parliament changes to the Law on Payment Services of 19 August 2011 – IF –max. 0,5% for each card. Adoption (2014) by Parliament changes to the Law on Payment Services of 19 August 2011 – IF –max for DC 0,2%, for CC 0,3%.

9. 9 Legal environment for cashless operations - legislation arising from the EU law (8) Directive 2014/92/EU on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features (PAD):  Access to payment accounts: these provisions provide all EU consumers, without being residents of the country where the credit institution is located and irrespective of their financial situation, with a right to open a payment account that allows them to perform essential operations  Comparability of payment account fees: by making it easier for consumers to compare the fees charged for payment accounts by payment service providers in the EU.  Payment account switching: by establishing a simple and quick procedure for consumers who wish to switch their payment account to one with another payment service provider within the same MS and to assist consumers who hold a payment account with a bank and want to open another account in a different country.

10. 10 Legal environment for cashless operations - legislation arising from the EU law (9) Directive 2014/92/EU - (PAD):  ‘Switching’ or ‘switching service’ means, upon a consumer’s request, transferring from one payment service provider to another either the information about all or some standing orders for credit transfers, recurring direct debits and recurring incoming credit transfers executed on a payment account, or any positive payment account balance from one payment account to the other, or both, with or without closing the former payment account.  "Payment account with basic features” includes the following services:  services enabling all the operations required for the opening, operating and closing of a payment account;  services enabling funds to be placed in a payment account;  services enabling cash withdrawals within the Union from a payment account at the counter or at automated teller machines during or outside the credit institution’s opening hours;  execution of the following payment transactions within the Union: (i) direct debits; (ii) payment transactions through a payment card, including online payments; (iii) credit transfers, including standing orders, at, where available, terminals and counters and via the online facilities of the credit institution.

11. 11 Legal environment for cashless operations - legislation arising from the EU law (10) Regulation of the European Parliament establishing technical and business requirements for credit transfers and direct debits in euro (SEPA Regulation). Single European Payment Area concept. The Regulation “lays down rules for credit transfer and direct debit transactions denominated in euro within the Union where both the payer’s payment service provider (hereinafter: "PSP") and the payee’s PSP are located in the Union, or where the sole PSP in the payment transaction is located in the Union”. Consumers wanting to make a SEPA payment will be asked by their PSP to provide the IBAN (International Bank Account Number) and BIC (Business Identifier Code) of the destination account.

12. 12 Legal environment for cashless operations – other national legislation (1) Foreign Exchange Act of 27 July 2002 imposes obligations: making a declaration in writing to customs or border guard authorities of importation into or exportation from the country of foreign exchange gold and platinum, irrespective of the amount, and of domestic and foreign means of payment, should the aggregate amount thereof exceed the equivalent of EUR 10,000. This obligation does not apply to residents or non-residents crossing borders within the Schengen area; making international money transfers and domestic settlements in respect of foreign exchange turnover via authorised banks, should the amount transferred or settled exceed the equivalent of EUR 15,000. presenting to customs or border guard authorities – on demand – foreign exchange and domestic means of payment imported into or exported from the country.

13. 13 Legal environment for cashless operations – other national legislation (2) Article 22 of the Act of 2 July 2004 on freedom of economic activity:  Payments related to the economic activity conducted by entrepreneurs must be made or received via the entrepreneur’s bank account in each case if:  another entrepreneur is party to the transaction, and  the one-off value of the transaction, regardless of the number of resulting payments, exceeds the equivalent of EUR 15 000 converted into PLN based on average foreign currency exchange rate set by the National Bank of Poland as of the last day of the month preceding the month during which the transaction has been concluded.  Entrepreneurs who are members of co-operative savings and credit banks may meet the obligation referred to in above via the co-operative savings and credit bank account.

14. 14 Legal environment for cashless operations – other national legislation (3) Art. 61of the Tax Ordinance Act of 29 August1997:  Payment of taxes by taxpayers pursuing economic activity and obliged to keep an account book or book of receipts and expenses shall be made by payment order.  The payment of stamp duty by the taxpayers referred to in above may be made in cash.  The payment of taxes by micro-enterprises within the meaning of the Act on the Freedom of Economic Activity of 2 July 2004 may also be made in cash.  The provision mentioned above shall not apply:  to the payment of taxes not related to the pursued economic activity;  when tax payment is, in accordance with the provisions of tax law, made by securities or excise duty marks;  to the collection of taxes by tax remitters or tax collectors.

15. 15 Legal environment for cashless operations – other national legislation (4) Art. 61a of the Tax Ordinance Act of 29 August1997:  Commune council, county council and voivodship legislative body may issue a resolution allowing the payment of taxes constituting the income of a commune, county or voivodship budget to be made by a payment card.  In the event referred to in above the day of making a tax payment will be deemed as the day of debiting the bank account of the taxpayer, tax remitter or tax collector, or the account of the taxpayer, tax remitter or tax collector in a co-operative savings and credit union.

16. 16 Legal environment for cashless operations – other national legislation (5) Article 15e of the Gambling Law of 19 November 2009: The entity operating betting via the Internet must perform transactions stemming from the betting exclusively with the use of a bank account kept at:  a national bank in line with Article 4 s. 1 point 1 of the Banking Law of 29 August 1997;  the branch of a foreign bank in line with Article 4 s. 1 point 20 of the Banking Law;  a credit institution in line with Article 4 s. 1 point 17 of the Banking Law, which engages in the form of business activities defined under Article 48i of the Law.”;  other institution empowered to run a payment account according to Act of 19 August 2011 on payment services.

17. 17 Legal environment for cashless operations – other national legislation (6) Act of 16th November 2000 on counteracting money laundering and terrorism financing :  Any obligated institution conducting a transaction exceeding the equivalent of 15.000 EURO is required to register such a transaction, also if it is carried out by more than one single operation but the circumstances indicate that they are linked and that they were divided into operations of less value with the intent to avoid the registration requirement.  In case of casino operators under the provisions of the Gambling Act of 19 November 2009 ( Journal of Laws No. 201 item 1540, as amended), the obligation referred to in paragraph 1 involves purchase or sale of gambling chips of the value equivalent to at least 1.000 EUR.  Any obligated institution conducting a transaction, the circumstances of which may suggest that it was related to money laundering or terrorist financing, is required to register such a transaction, regardless of its value and character.

18. 18 Legal environment for cashless operations – other national legislation (7) Act of 16th November 2000 on counteracting money laundering and terrorism financing : The obligation referred to above shall not apply to: transfers from a deposit account to a time deposit account belonging to the same client at the same obligated institution; transfers to a deposit account from a time deposit account belonging to the same client at the same obligated institution; incoming transfers with the exception of bank transfers from abroad; transactions related to the internal management of the obligated institutions; transactions concluded on the interbank market; banks associating cooperative banks, provided the transaction has been registered in the associated co-operative bank; transactions of temporary lien to secure asset values, conducted for the duration of the lien contract with the obligated institution.

19. 19 Legal environment for cashless operations – other national legislation (8) Art. 47 of the Social Insurance System Act of October 13th 1998:  The contribution payer shall pay the contribution and submit the relevant settlement declaration form and name-specific monthly reports in the same period for a given month.  Contributions or payments shall be made to bank accounts indicated by the Institute, in separate payments, broken down by: inter alia:  social security  health insurance,  Labour Fund and Guaranteed Employee Benefit Fund,  State Bridge Fund.

20. 20 Legal environment for cashless operations – other national legislation (9) Art. 47 of the Social Insurance System Act of October 13th 1998:  A contribution payer shall be obliged to pay due contribution through cashless transactions, by way of debiting contribution payer’s bank account, however it does not apply to contribution payers who are natural persons if they do not pursue non- agricultural business activities within the meaning of provisions on business activities or other special provisions.  Information included in the documents of payment shall be transferred through the interbank electronic system as a payment order for the Social Insurance Institution, or through the electronic inter-branch settlement system of the National Bank of Poland. The order shall include information on the data and on the title of payment and period for which the payment is made.

21. 21 Expert Mission on Electronic Payments Thank you for your attantion