Ukraine's National Bank tightens requirements for acquirers facilitating payment operations
MOSCOW. March 14 (Interfax) - In response to Verkhovna Rada deputies' remarks criticizing banks and financial companies over their role in gambling businesses' tax evasion schemes, the National Bank of Ukraine (NBU) announced on Monday that it is tightening requirements for acquirers that facilitate payment operations.
"Compliance by payment market players with these requirements will help prevent them from committing the following actions: money transfers from or to entities which are involved in unlicensed operations, tax evasion activities, etc., miscoding (substituting the code of the category of a merchant's operations) when facilitating payment operations, substitution of information that accompanies a payment operation," Ukrainian media quoted the NBU as saying.
This measure will help increase the transparency of payment operations and better protect the rights of their users, it said.
In particular, the NBU ordered acquirers and other suppliers of payment services (banks and non-bank financial institutions) that take part in a payment operation to accompany it with detailed information in accordance with the law, the NBU said.
The NBU specified that when a payment operation between accounts of individuals and legal entities was initiated, some payment market players did not accompany such payments with information about the recipient of the money transfer, a circumstance which also made it impossible to identify the recipient of such payments.
Furthermore, the regulator also ruled that an acquirer or another supplier of payment services (a bank or a non-bank financial institution) that facilitates a payment service initiated by a user in favor of a recipient is neither the payer nor the recipient in such cases.
"The substitution of the role of a payment market participant created conditions for concealing the goal of transactions. For instance, operations to top up betting accounts at gambling businesses was disguised as money transfers. A payment facilitator was required to fulfill a payer's transfer order - i.e. transfer money to a given recipient instead of subsequently deciding on its own who to transfer this payment to," the NBU said.
The NBU also ordered acquirers to have information about the payer and the recipient (the full number of the payment card/instrument and the merchant's account number) in every payment operation facilitated by them, including an operation involving another supplier of payment services.
The relevant norms are contained in the NBU board's March 10, 2023 executive order on amendments to the provision on the procedure for emission and acquiring of payment instruments, which enters into force on March 14, 2023, it said. Payment market players that specialize in emission and acquiring of payment instruments will have one month after the enactment of the document to bring their activities in line with its requirements.