Ireland is home to some of the world’s leading payments companies, attracted in part by Ireland’s thriving financial services and growing FinTech sector. There are a number of advantages to being authorised in Ireland as an electronic money (“e-money”) or payment institution.
- the ability to passport to other EEA member states either on a branch or a cross-border services basis;
- a favourable tax regime, due to a combination of a 12.5% corporate tax rate and an exceptionally extensive and comprehensive set of double tax agreements; and
- access to a sophisticated financial services ecosystem with a deep pool of staff, managers, professional advisers, regulators and service providers including not only native English speakers but a sizeable international population (roughly 17%).
E-Money is regulated under the European Communities (Electronic Money) Regulations 2011 (“E-money Regulations”), which transpose the E-Money Directive 2009/110 into Irish law, without any significant additional national measures or “gold plating”. Payment institutions are regulated under the European Union (Payment Services) Regulations 2018 (“Payment Services Regulations”), which transpose the revised Payment Services Directive 2015/2366 into Irish law, again without any significant national gold plating. The Payment Services Regulations also amend the E-money Regulations in a number of respects.
The Central Bank of Ireland (“CBI”) is responsible for the authorisation, prudential regulation and supervision of both e-money and payment institutions in Ireland.
Passporting and Third Country Firms
E-Money and payment institutions authorised in Ireland can passport to other EEA member states on either a services or cross-border establishment basis, subject to the fulfilment of certain notification requirements. An e-money institution/payment institution authorised in another member state can also passport into Ireland.
An e-money or a payments business established outside the EEA, can obtain passporting rights either by establishing itself or a subsidiary in Ireland (or in another member state) or by acquiring an existing authorised e-money/payment institution.
The Authorisation Process
All applications for authorisation as an e-money/payment institution in Ireland must be submitted to the CBI, using the follow forms:
- Authorisation as a Payment Institution (here);
- Registration as an Account Information Service Provider (here);
- Authorisation as an Electronic Money Institution (here); and
- Registration as a Small Electronic Money Institution (here).
The CBI has also published a Guidance Note on completing authorisation/registration applications under the Payment Services Regulations and the E-money Regulations (here).
The CBI offers the facility of an optional pre-application meeting to potential applicants to answer any specific questions those applicants may have about any aspect of the application process.
There are five stages to the authorisation process for an e-money/payment institution, once the applicant has submitted a completed Application Form and relevant accompanying documentation. These also apply to applicants applying for registration as account information service providers. The five stages are as follows:
Stage 1 - Acknowledgement: the CBI acknowledges receipt of the application within 3 working days.
Stage 2 - Key Information Check: the CBI checks that the applicant has submitted all the key information and documentation and confirms whether or not this is the case within 10 working days of receipt of the application. If the application is lacking any key information, the CBI will identify this information and the applicant can then decide to resubmit.
Stage 3 - Assessment Phase: the CBI assesses the application against the authorisation requirements and issues initial comments to the applicant on its application as well as subsequent comments based on its review of the applicant’s responses. The CBI has committed to a 90 working day assessment phase however, this period will be paused should the CBI request further information.
Stage 4 – Notification of Assessment: the CBI notifies the applicant of the outcome of the assessment process. Where the assessment is favourable, the CBI will notify the applicant that it proposes to authorise. This letter will also specify any specific conditions the CBI proposes to impose on the authorisation itself once granted, along with the reasons for these conditions. Applicants will have the opportunity to make representations regarding these conditions before the CBI makes its decision.
If the CBI is not satisfied that it should authorise the applicant on the basis of the assessment, it will set out the areas to be addressed. The applicant has the right to respond to any issues raised by the CBI in its notification and the CBI will assess any responses made before notifying the applicant of its decision in Stage 5 of the process.
Stage 5 – Notification of Decision: where the CBI intends to authorise the applicant it aims to notify the applicant of its decision within 10 working days of any pre-conditions to authorisation being satisfied. In a case where the CIB is minded to refuse the application, the Central Bank will notify the applicant of the proposed grounds for refusal and the next steps in that process. These steps will include an opportunity for the applicant to make submissions in response to the proposed refusal.
An entity that wishes to become authorised as an e-money/payment institution under Irish law must fulfil a number of requirements. For existing groups with substantial operations outside Ireland, an important requirement will be the CBI's emphasis on ensuring that the applicant's "heart and mind" will be located in Ireland. This essentially means that the CBI will need to be satisfied that the applicant will be properly run in Ireland and that the CBI will be able to supervise it effectively. Among other things, the CBI will expect to see present in Ireland:
- a senior management team with strength and depth overseen and directed by a strong board; and
- organisation structure and reporting lines which ensure there is appropriate separation and oversight of all activities.
There is no requirement for any specific individual to be resident in Ireland. However, ideally, the personnel who are to fulfil the applicant's core functions should operate out of Ireland.
An Irish authorised e-money/payment institution can outsource/delegate activities to entities in other jurisdictions. However, overall responsibility for ensuring compliance with legislative requirements must stay in Ireland. In addition, a payment institution must notify the Central Bank when it intends to outsource operational functions of payment services. The Payment Services Regulations set out a number of requirements with which a payment institution must comply when outsourcing “important” operational functions, such as IT systems.