BAKU, Azerbaijan, September 29. A legal framework related to licensing and control of electronic money and payment organizations will be formed within the Law on Payment Services and Payment Systems, Tagiyev Hayaleddin, chief specialist of the Payment Systems and Settlements Department of the Central Bank of Azerbaijan (CBA), told Trend.
According to him, it will create a legal basis for the provision of payment services by banks, local branches of foreign banks, and national postal operators, as well as new payment service providers such as payment institutions and e-money institutions.
"The legal framework and mechanisms for regulating the release and use of e-money will be defined. With the establishment of a legal framework for the use of e-money and mobile wallets, financial inclusiveness will expand and play a significant role in bringing various retail payments into the cashless circulation. Lawful protection for users of payment services will be strengthened, and payment services will be utilized in a more efficient and secure manner," he said.
Tagiyev Hayaleddin also added that there will be defined information rules for the provision of payment services, execution and refusal to execute payment orders, the procedure for resolving unauthorized or incorrectly executed payment transactions, as well as the rights and obligations of providers of payment services and users of payment services on payment instruments and the degree of their responsibility.
Tagiev noted that third-party providers will work on the basis of open banking principles.
"Innovative payment service providers such as Fintex, an account information service provider and a payment transaction intermediary service provider, will be regulated. Security requirements, such as enhanced customer authentication, will be established to protect electronic payments and consumers' payment information. Thus, there will be a reduction in the risk of fraud in online payments and electronic banking, as well as protection of user data privacy," he emphasized.
According to him, a legal basis will be created for the formation of a network of payment agents providing payment services on behalf of banks, payment organizations, and e-money institutions.
"Agents in the field of payment services are legal entities or individual entrepreneurs on the basis of a contract. This will make it possible to provide payment services by agents in remote rural areas not covered by bank branches. A legal framework for licensing, regulation, and control of their activities will be created for the establishment of payment system operators. At the same time, the formation of the payment system market in the country will be achieved on a more competitive basis. Conditions for the creation of payment system operators and settlement agents will be provided," he added.
The Law "On Payment Services and Payment Systems" was adopted by Milli Majlis (Parliament) on July 14 and signed by President of Azerbaijan Ilham Aliyev on August 9.