BAKU, Azerbaijan, August 10. The law "on payment services and payment systems" will promote the formation of an innovative and more competitive digital payment ecosystem and the overall financial market, the Deputy Director of the Payment Systems Department at the Bank of Baku and the Head of the Expert Group on Payment Systems and Digital Banking at the Azerbaijan Banks Association (ABA), Tamerlan Rustamov, told Trend.
According to Rustamov, the law's enforcement creates many new opportunities in the financial market.
"Once it is put into effect, we will be able to include banks and non-bank credit organizations in the category of payment service providers, together with electronic money systems. This implies that financial institutions that have been a part of the digital payment ecosystem for a while will be legally recognized as payment systems or electronic money systems through licensing or registration" he said.
Besides, according to him, the law establishes a regulatory framework for the above organizations and broadens the range of their services.
"These payment service providers typically prioritize the implementation of innovative payment solutions and technologies to compete with traditional financial institutions," Rustamov noted. "The encouragement of innovative payment instruments and technologies will offer new opportunities in financial markets. Intermediary services and services related to providing information about accounts, defined as payment services in the law, will require the application of open banking technologies."
He emphasized that the law will accelerate the process of forming digital platforms, embarking on a new stage of development for financial markets.
"The legislation will also allow payment systems to offer their services based on a unified electronic platform. The broad databases and innovative foundations of digital platforms enable the provision of goods and services tailored to the requirements of payment service users," the ABA representative explained.
"The law creates new possibilities for extending access to financial services and is essential to the growth of financial markets. Financial accessibility will be facilitated by the provision of digital payment services, the development of a network of payment agents, and the establishment of the regulatory framework for organizing payment systems, all of which will be crucial in fostering the growth of diverse connections in the ecosystem based on the "web" principle," he pointed out.
Rustamov added that another innovation will be the strengthening of consumer rights protection.
"Informing users of payment services, handling payment claims, introducing service fees, sharing responsibilities for unauthorized payment operations, further clarifying contractual relationships, and demanding obligations related to payment instruments and personalized information security will contribute to further reinforcing consumer rights," he concluded.
The "law on payment services and payment systems" was passed by the Azerbaijani Parliament on July 14 and signed by the President of the Republic of Azerbaijan, Ilham Aliyev, on August 9.