OFFICIAL CLARIFICATION
ON ARTICLE 17, PART 1, POINT 'G' OF THE LAW OF THE REPUBLIC OF ARMENIA ON PAYMENT SYSTEMS AND PAYMENT ORGANIZATIONS
Based on the numerous letters recently addressed to the Central Bank of the Republic of Armenia related to the payment services defined in Article 17, Part 1, Point 'g' of the Law of the Republic of Armenia on Payment Systems and Payment Organizations (hereinafter referred to as the Law),
Considering that the definitions of payment services as set out by the Law cause misunderstandings among a wide range of individuals,
With the aim of clarifying the scope of the payment services defined in Article 17, Part 1, Point 'g' of the Law, as well as preventing the provision of such services by individuals without a license,
Taking into account the purpose of regulating the provision of payment services by licensed individuals as defined by the Law, which is to protect the rights of individuals using such services and to create guarantees for the execution of payments to the beneficiary,
Based on Point 'b' of Part 2 of Article 87 of the Law of the Republic of Armenia on Legal Acts, the Central Bank of the Republic of Armenia
Officially Clarifies:
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For the purposes of this official clarification, payments from the payer to the beneficiary, regardless of the number of intermediaries involved in the payment process, are made in currency, either in cash or non-cash, including through electronic money (hereinafter referred to as payment).
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According to Article 17, Part 1, Point 'g' of the Law, a payment service provider is an individual (hereinafter referred to as the payment agent), who:
2.1. As part of their entrepreneurial activity, accepts payments from the payer directed to the beneficiary, where the sole purpose of such payments is the transfer of funds, and the payment agent does not provide any type of property (hereinafter referred to as goods), property rights, any type of service (except for the pure money transfer payment service) or any document (in paper or electronic form) confirming the right to receive certain goods, property rights, or services (hereinafter referred to as the Document) to the payer in return for such payments.
Example: The transfer of funds from an individual or legal entity (payer) located abroad or within the Republic of Armenia (for example, for donation or similar purposes) to another individual or legal entity (beneficiary), which is carried out through a payment agent as part of their entrepreneurial activity.
2.2. Performs the activity mentioned in sub-point 2.1 of this clarification through any number of payment agents or other intermediaries (any legal or natural persons, or individual entrepreneurs) (in various chain schemes), which, although splitting the money transfer into several stages, the ultimate goal (essence) of this chain activity is the transfer of funds from one person (payer) to another (beneficiary). In this case, all intermediaries involved in the chain and operating within the territory of the Republic of Armenia (any legal or natural persons, or individual entrepreneurs), who accept the payment and transfer it directly to the next intermediary or beneficiary (the next link in the chain), will be considered payment agents.
Example: A company (or individual) registered abroad, which has the right to conduct money transfers under its national legislation, accepts payments from various individuals (payers) and makes payments to the beneficiary through an individual entrepreneur, legal entity, or natural person registered or residing in Armenia. In this case, the service is split into two parts: payment acceptance by the person abroad and payment execution in Armenia through another person. Each service provided within the territory of Armenia will be considered as the provision of payment services under Article 17, Part 1, Point 'g' of the Law.2.3. Accepts payments from payers directed to the beneficiaries, which, although directed towards payment for any type of goods or services, including the consumption of electricity, natural gas, drinking water, mobile or fixed telecommunications services (regardless of whether the service, goods, property rights, or Document have already been provided or will be provided in the future), the individual making the money transfers to the beneficiaries (payment agent) is in no way involved in the process of providing the service, goods, property rights, or Document (the payment agent exclusively conducts the money transfer from the payer to the beneficiary). In other words, the payment agent performs the activities mentioned in sub-points 2.1 or 2.2 of this official clarification and does not provide any service to the payer other than the execution of the money transfer (accepting the payment from the payer and transferring the payment to the beneficiary).
Example 1: A payment is made through a money transfer for any bilateral transaction between the payer and the beneficiary (for example, based on a sales contract), but the money transfer executor (payment agent) is not a party to this transaction (seller of goods) and, therefore, does not perform any obligations defined by that contract in return for receiving the payment, meaning they do not act as a seller of goods or provider of the Document.
Example 2: Accepts payments from the payer directed to obtaining services provided by individuals operating in the field of public utility regulation or payment for already provided services. Here, the service provided by the payment agent is exclusively accepting and making payments, as the agent is not involved in the provision of the service. -
According to Article 17, Part 1, Point 'g' of the Law, individuals (commercial intermediaries) who, on the basis of a relevant civil law contract or power of attorney concluded with the provider (hereinafter referred to as the principal) of the service, goods, or property rights, act on behalf of the principal and accept payments from third parties while simultaneously providing or committing to provide (or before accepting the payment, the relevant service, goods, property rights, or Document has already been provided by the commercial intermediary), are not considered as payment service providers.
Example 1: A commercial intermediary providing delivery services, who, on the basis of a relevant civil law contract or power of attorney concluded with the principal, delivers the principal's goods to various customers and accepts payments directed to the principal from the customers. In this case, upon accepting the payment, the intermediary provides the goods, and according to the contract between the delivery service provider and the principal, the customer’s obligation to the principal is considered fulfilled. The activity of the commercial intermediary providing delivery services in this example is not considered as acceptance and execution of payments for profit since it is accompanied by the supply of goods by this intermediary.
Example 2: Individuals providing mobile phone account top-up services, who, as agents of the mobile telecommunications operator, accept prepayments from payers and simultaneously top up the relevant accounts of individuals with airtime equivalent to the amount topped up. In this case, the individual providing the top-up service provides airtime equivalent to the amount topped up in return for the payment.
Example 3: Commercial intermediaries accepting orders and prepayments from buyers to purchase goods through catalogs or various auction organizers, and the goods are provided to the buyer either immediately or in the future, or the commercial intermediary provides the buyer with a Document granting the right to receive the goods from the seller in the future.
Example 4: An individual acting on behalf of an organization (principal), provides a Document (e.g., airline tickets, lottery or other tickets) in return for the payment, granting the buyer the right to receive the specified service from the principal on the designated date. For example, an airline ticket seller company provides the buyer with a Document confirming the right to receive the airline service on the specified date upon payment.