Payment service provider license in Georgia

A payment service provider license in Georgia is an instrument that will greatly facilitate your admission to the marketplace for digital payment and settlement systems and transfers, additionally it will also considerably optimize costs because of a positive tax regime in Georgia. The country practically lets you operate in a zero-tax regime especially if you operate at an international scale. Furthermore the country has maximally simplified the registration and set up of business – which is why Georgia has been ranked second on Doing business rating for numerous years in a row.

Benefits of having a PSP license in Georgia

PSPlicense is issued by the National Bank of the country and gives the right to:

• debiting and crediting funds;
• directdebit of theaccount using a payment card or other financial instrument, as well as for credit payments within the established amounts;
• emission and acquiring of electronic money and other payment instruments;
• service ofmoneytransfers;
• servicing transactions with electronic moneyperformed by a smartphone, via the Internet or in another way;
• execution of a transactionbased on the consentreceived from the payer using a telecommunications, digital or information technology device for the benefit of the payment system or a network operator playing the role of an intermediary between the payer and the recipient.

Companies that have a payment system provider license in Georgia are able to service international money transfers, non-cash payments between individuals and companies, purchases of goods and services in online stores.And also use the tax advantages of the jurisdiction for doing business in the markets of other countries.

What operations can be provided by the owner of a payment system provider license in Georgia?

Companies with aPSPlicense get the opportunity to:

• place customers’ electronic money on their accounts;
• make transfers both within own payment system and outside it;
• issue payment cards and own e-currency;
• provide payment services to third parties;
• open aMerchantaccountto service payments;
• carry out transactions with bitcoins and other virtual money.

The latter is especially important for Georgia, since this country ranks 3rd in the world in terms of the volume ofcryptocurrency mining

Payment services market in Georgia

A payment system provider license in Georgia is becoming increasingly more popular.Since the market for electronic payment services in the country is still young, it is constantly developing.For example, the number of remittances isgrowing steadilydespitethe economic crisiscaused by the coronavirus pandemic.In July 2020, the volume of transfers increased by 22.1% compared to the same period last year.In total, during the reporting period, inflows from abroad to Georgia amounted to 188.7millionUSD, and for the whole of 2019 – to 1.7 billionUSD.And the financial market is actively developing and growing in the country, the number of non-cash transfers and purchases in online stores is increasing.

According to the National Bank of Georgia, the number of transactions using electronic money reached the level of March 2020 and the market began to gradually revive.Recall that this was the month when the country introducedquarantine related restrictions.

Volumes of transactions carried out byPSP-providers in Georgia:

Month, 2020	Transactions with electronic money, lari	Transactions excludinge-money, lari	Total,lari
January	8 965 119	460 057 485	469,022 604
February	6 162 245	475 676 130	481 838 375
March	8 702 971	460 085 812	468 788 783
April	4 084 564	296 186 824	300 271 388
May	4,969,861	357 901 815	362 871 676
June	8 792 882	429 203 625	437 996 507
	41 677 641	2 479 111 692	2 520 789 333

In total, 30 companies have a payment system provider license in Georgia as of August 17, 2020, all of them are registered in Tbilisi.

	Name	The form	Date ofregistration
1	“EMoneyGeorgia”	JSC	12.12.2012
2	“Oppa”	JSC	12.12.2012
3	Direct Debit Georgia	LTD	12.12.2012
4	“TBC Pay”	LTD	24.12.2012
5	“Unipay”	LTD	12/27/2012
6	“Money Movers”	LTD	14.01.2013
7	Metro Service +	LTD	04.04.2013
8	“Adjarapay”	LTD	04/30/2013
9	“Mobile Finance Service-Georgia”	JSC	07.05.2013
10	United Clearing Center	JSC	June 17, 2013
11	“All Pay Way”	LTD	04.08.2015
12	“Numus”	LTD	04/19/2016
13	“UPS”	LTD	07/14/2016
14	“Geo Money”	LTD	23.09.2016
15	“The PayUnicard”	LTD	03.02.2017
16	“NBC”	LTD	02/15/2017
17	“Smart Payment Systems”	LTD	02/07/2018
18	“Monremi”	LTD	24.05.2018
19	“Max Express”	LTD	08/03/2018
20	“CleardSystems’“	LTD	23.08.2018
21	“ProtellerGeorgia”	LTD	21.09.2018
22	“Fastpay”	LTD	12.10.2018
23	Posta Pay	JSC	18.10.2018
24	“MoneyQo”	LTD	12/19/2018
25	“Neolet”	LTD	12/21/2018
26	“Soliground”	LTD	03/15/2019
27	“E-market”	LTD	04/15/2019
28	“Peitron”	LTD	11.11.2019
29	“InexPay”	LTD	05/07/2020
30	“DMServices”	LTD	06/25/2020

As you can see from the table, most of the currentPSPproviders operate in Georgia in the form ofLLCand were registered in 2018.There are also 2 newcomers on the market -InexPayandDMServicesentered the payment services market in 2020.

Requirements for PSP providers in Georgia

A payment system provider license in Georgia is available to those companies which meet the following requirements:

• form of business: limited liability company or joint stock company;
• presence of a legal address and office on the territory of Georgia;
• authorized capital in the amount of GEL 250,000 (must be formed at the time of registration of the license);
• no convictions among founders and leaders of the company.

The advantages of company registration in the local jurisdiction is that in Georgia the payment system provider license is granted, even if there are foreigners among the founders.At the same time,there are no restrictions on the number of founders, directors, employees.

Payment system provider license in Georgia: list of required documents

In order to serve transactions with electronic money, international transfers,merchantaccounts in Georgia, you will need to undergo the licensing of the company by the National Bank of the country, and for that purpose, the following set of documents is required.

• completed form according to the established template;
• a list of payment services that the provider plans to provide;
• a schematic description of each payment service, including information on the method of data transmission at the time of the beginning of the transaction to its completion;
• a description of the electronic system that will service transactions, including: a list of hardware and software with an indication of the manufacturer;list of communication means and encryption algorithms;description of the program interface;
• an extract from the Public Register of Entrepreneurs and Non-Entrepreneurial Legal Entities;
• a breakdown of the authorized capital, up to the final beneficiary;
• documents allowing to identify the owner of the company;
• certificate of no criminal record of the beneficiary (not older than 60 days, if issued by the authorities of foreign states);
• lease agreement, purchase / sale / gift agreement or other document confirming the right to use or own the real estate where thePSPcompanyoffice will be located;
• business plan for the provision of payment services in Georgia;
• licenses,permits, ifavailable.

Attention!!!All documentsissued by the authorities of foreign states must be translated into Georgian and notarized.

Payment system provider licensing procedure in Georgia

A payment system provider license in Georgia is issued after the successful completion of the following procedure:

1. Preparation of constituent documents (all documents must be in Georgian).
2. Registration of a company in the form of LLC or JSC in the House of Justice in Georgia (takes 1-2 business days and costs 100 or 200 GEL, depending on the speed of registration).
3. Opening a corporate account in a Georgian bank and formation of statutory capital.
4. Submission of documents to the National Bank of Georgia.

The regulator issues the resolution to register aPSPcompany in Georgia within 60 calendar days after receiving the complete package of documents.In case ofinaccuracies or incompleteness of documents package, the applicant is given 30 calendar days to eliminate the deficiencies.

Attention!!!If the second statement on the elimination of inaccuracies/deficiencies is not delivered to the address of the legal entity within 10 calendar days, the National Bank has the right to reject registration.

After a positive resolution to grant a payment system provider license in Georgia, the regulator publishes the relevant information on its website within 2 working days.

Responsibilities of a PSP company in Georgia

In order to retain the payment system provider license in Georgia in the long-time perspective, the company must fulfill a number of requirements:

• the presence of a headquarters in the country;
• data on transactions should bestoredin such a way that they are available for submission to the National Bank at the first request;
• access to the internal database of the payment system to the regulator;
• a representative of aPSPcompany must be present in Georgia for at least 14 calendar days in a month.

Furthermore, it is necessary to ensure high reliability and confidentiality.For violation of therequirementsestablished by the regulator, sanctions are applied to the company, up to the cancellation of the license.

What are the advantages of a payment system provider license in Georgia?

It should be noted straightaway that the payment system provider license regulates the company’s activities on the territory of Georgia.Therefore, if a legal entity wants to enter the financial market of another country, it will first have to obtain a license from the local regulator.However, having a license in Georgia and reliable work experience can have a positive impact on the positive resolution.

In addition, theadvantages of a payment system provider license in Georgia are:

• an opportunity to operate in a developing market of payment services, where there is a stable growth of international transfers;
• Lack of burdensome or complicated requirements and a relatively small package of documents;
• registration speed – a license is issued in a maximum of 60 calendar days;
• no restrictions to have non-resident founders;
• the opportunity to obtain the status of an international financial company (5% of income tax, exemption on property tax, taxation of dividends, income tax on wages).

If you are interested in a payment system provider license in Georgia, contact us at info@offshore-pro.info or by online chat, and we will provide you with expert advice on this matter.