Obtaining license for electronic money in Hungary | Law&Trust International

License for electronic money in Hungary

According to definition prescribed in paragraph 22 of Article 2 "Tv." (the Act LXXXV of the HFSA (Hungarian Financial Supervisory Authority) of 2009 on the control over carrying out payment services), payment organization is a credit institution, a specialized credit organization that issues electronic money, ... a financial institution, the National Bank of Hungary, the State Treasury, which business includes provision of payment services.

The Act CXII of the HFSA of 1996 on "Credit Institutions and Financial Enterprises" ("Hpt.", Section: Electronic Money - Section 6C) is the main regulatory act to be adhered to by the registrar in Hungary.

It provides for permitting procedures, licensing, regulations for compliance with property requirements, and control over the activities of financial institutions.

The foregoing document reckons issuing of electronic money and related activities among financial services.
All the conditions imposed on payment organizations relates to the operators of electronic money, and in addition they are not prohibited from conducting certain types of credit activity.

In order to obtain license

for electronic money in Hungary, it is necessary (Section 18/A CXII of the HFSA of 1996):

    • o contribute the whole amount of the authorized capital into the established enterprise;
    • to present the draft of organizational structure, management and control mechanisms;
    • for companies registered abroad, it is necessary to appoint a representative (lawyer from Hungarian law firm or authorized representative of the branch of the applicant's bank in Hungary);
    • confirmation of compliance of personnel and availability of necessary funds.

Payment organizations and operators of electronic money shall submit the following materials in addition to the application for license:

  • A) programme of operations regarding provision of certain services (payment instruments)

    B) business plan for the first three years, providing for the availability of personnel, infrastructure facilities for conducting activities with high degree of reliability

    C) description of means of protecting payments from the clients, including software that the applicant will use for recording and protecting the clients’ payments and audit certificate on reliability of such software

    D) description of risk management and accounting system

    E) name of the applicant's auditor

    F) description of internal control system for protection against risks associated with money laundering obtained by criminal means and financing of terrorism

    G) alleged intermediaries of payment services, presumptive outsourcing, if planned

    H) description of the payment system

    I) identity data of the management of the enterprise and confirmation of compliance with the requirements of Hpt.

    J) statutory documents of the applicant

    K) document not older than 30 days confirming that the applicant does not have debts from tax or customs authorities or other responsible authorities of another state if the applicant is not resident of Hungary

    L) statement that the other types of activities of the applicant do not constitute a danger to the full-fledged operation of the management of the electronic money operator

    M) document not older than 30 days confirming that the company does not go through bankruptcy proceedings and none of its management passes the disqualification procedure

Certain other requirements may also be imposed.
The administrative procedure for granting the license takes 90 days, but can be continued up to 180 days. According to organizational and legal form, the enterprise can be private joint-stock company, limited liability company, branch of the company head office of which is located in the European Union.
Payment of administrative services for granting permission in accordance with the Decree of the Ministry of Finance No. 12/2002 on the cost of administrative services is 3000 euros and more, depending on the extent of the license. The services of the operator of electronic payment systems correspond to promising international business.

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