Criteria for participation in the payment system of Automatia Pankkiautomaatit Oy

In March 2017, Automatia Pankkiautomaatit Oy launched the Siirto payment system. The system enables the transfer of payments made with mobile applications as instant payments using the recipient's telephone number as the routing data. The service involves a payment recipient register, which links the recipient's telephone number to his or her account number.
​The participants of the payment system provide a service based on Automatia's system to their respective customers.

The FIN-FSA is of the view that access to Automatia's payment system needs to be contingent on having the authorisation of a credit institution or payment institution.

Payment transfer is subject to authorisation

Offering of payment services constitutes a regulated activity that requires authorisation. The FIN-FSA grants these authorisations and supervises service providers which offer payment services. Payment services may be offered by credit institutions, authorised payment institutions, notified payment institutions providing payment services with the authorisation in another EU country, and payment intermediaries registered with the FIN-FSA.

Access to the payment system requires authorisation

The objectives of the FIN-FSA’s activities include the stable operation of credit, insurance and pension institutions and other supervised entities required for the stability of the financial markets. A further objective is the maintenance of general trust in the operation of the financial markets.

Participants in Automatia's payment system must have the authorisation of a credit institution or a payment institution.

Justifications:

• In order that it would be possible for a payment institution offering cross-border payment services from another EU country to participate in Automatia's payment system, the other participants of the system also must be authorised to send and receive payments throughout the EU area. Payment intermediaries registered with the FIN-FSA are authorised to offer payment services only within Finland, and to and from outside the EU area; therefore their participation in the system would endanger the EU-wide operability of the service.
• Payment intermediaries filing a registration are not subject to statutory capital adequacy requirements.
• The requirements of the Payment Institutions Act regarding a registration to take up payment services are lighter than those for payment institutions applying for an authorisation.
• The FIN-FSA's regulations and guidelines on operational risk management and outsourcing apply to authorised payment institutions, but only as partial recommendations to registered payment intermediaries.
• The FIN-FSA does not have authority to issue binding regulations regarding risk management in general, operational risk management, outsourcing and reporting of disruptions or customer identification and know-your-customer procedures to registered payment intermediaries.
• The FIN-FSA may give recommendations but it has more limited authority to intervene in identified shortcomings than regarding authorised payment institutions.

In order to maintain the stability, reliability and security of payment systems and maintain public trust in payment systems, the participants in the systems are required to have capital adequacy, strong risk management, secure systems and regulatory compliance in all of the processes involved in their operations. Since payment transfer constitutes a network activity, all participants of a payment system must operate in a reliable and secure manner. Severe operational shortcomings or the endangerment of payment transfer due to a single participant also affect all other participants in the payment system.

For further information, please contact

Senior Risk Expert Anne Nisén, tel. +358 9 183 5211 or anne.nisen(at)fiva.fi

The corresponding Finnish-language supervision release was published on 12 May 2017.