The FMA is pleased to clarify the licensing requirements for e-money and payment service providers. In short, there is no specific licence for e-money institutions or payments service providers in New Zealand.
Instead, providers will have a range of obligations under New Zealand's financial services regulatory regime, either through the Financial Markets Conduct Act, or the Non-bank Deposit Takers Act. The level of regulation will largely depend on whether providers are issuing debt securities as part of their service offering. This would be the case if, in connection with the e-money or payments service, providers accept customer deposits or other repayable funds (other than on trust).
One of the FMA's purposes is promote innovation and flexibility while also ensuring consumers understand what they are buying. Through recent conversations with industry, we heard from providers who wanted greater clarity from the FMA on the requirements.
E-money and payment service providers offer services such as storing and managing electronic money (e-wallets), virtual currencies and currency conversions. It's a service that has the potential to offer genuine competition to the non-banking sector and one we believe should be embraced.
We recommend you seek independent legal advice if you think this may apply to you.
