Acquiring a Payment Service Provider (PSP) license in Georgia is a regulated process governed by the National Bank of Georgia (NBG). Payment service provider (provider) is a legal entity that provides payment services to a customer of a payment service in accordance with the legislation of Georgia; This guide outlines the key steps, requirements, and important considerations for businesses looking to obtain a PSP license under Georgian law.

Key Requirements for Registering as a PSP

To begin the process, applicants must prepare a comprehensive set of documents and meet specific legal and regulatory requirements as per the Georgian Law on Registration Fees and other relevant legislation:

1. Completed Registration Form: The form must be filled out with all relevant details about the provider.
2. List of Payment Services: A detailed list of the payment services the provider intends to offer must be submitted.
3. Information About Administrators and Significant Shareholders:
   ○ Information on each administrator of the provider.
   ○ Disclosure of significant direct or indirect shareholders, beneficial owners, and other individuals or entities with significant influence.
4. Compliance Documentation: A documentation compliance table showing adherence to the necessary regulations.
5. Proof of Registration Fee Payment:
   ○ Article 7 of the Law of Georgia “On Registration Fees” requires proof of payment for the registration fee, which is 5,000 GEL.
6. Payment Services Schematic Description: This detailed schematic must explain the flow of cash and information from the initiation of the payment operation to its completion. It should include:
   ○ A description of all participants (payer, provider, intermediary, agent, etc.).
   ○ The movement of funds and information through various stages of the process.
7. Details of the Electronic System: This includes:
   ○ An extract from the relevant registration authority of the manufacturer of the electronic system.
   ○ Information about the name, website, and obligations of the electronic system.
   ○ Locations for storing backup copies of customer accounts and transaction data.

PSP Registration Timeline and Process

Once the application is submitted, the National Bank of Georgia has 60 days to decide on the registration. If any deficiencies are found in the application, an additional 30 days may be granted for rectification. In complex cases, the NBG may extend the review period by another 30 days.

Additional Considerations for PSP Services

If your business will offer services closely related to payment services, such as:

● Collection services
● Currency exchange
● Data storage and processing
● Payment confirmation services

There are additional requirements that must be met under the BGB regulations. Ensure that all appendices and related documents are properly submitted to avoid delays.

NBG Regulations Regarding Specific Transactions

● Cryptocurrency and Gambling Transactions: The National Bank of Georgia has specific guidelines regarding transfers related to gambling companies and cryptocurrency exchanges. While personal cryptocurrency transactions are generally permissible, transfers for third-party purposes may be subject to stricter regulations.
● Market Reach: The NBG requires all PSP applicants to meet the same legal and operational standards, regardless of whether they serve domestic or international clients. Thus, expanding services to international markets may be essential for growth.

Addressing Software Demonstration Requirements

A notable concern for many PSP applicants is the NBG’s requirement to demonstrate software capabilities during the registration process. Given the high costs associated with developing or purchasing payment systems software—sometimes upwards of USD 25,000 to USD 100,000—this can pose a significant challenge for startups. The NBG imposes this requirement for regulatory assurance and to mitigate potential concerns raised by competitors in the industry.

Conclusion

The process of obtaining a PSP license in Georgia requires a thorough understanding of the regulations and documentation needed. By ensuring compliance with NBG’s requirements and leveraging expert advisory services, applicants can successfully navigate the complexities of the licensing process and position themselves for success in Georgia’s financial sector.

The process can be complex and involves navigating various regulatory requirements, but you don’t have to do it alone. Our law firm is here to provide expert guidance throughout every stage of the licensing process