By: Melissa Morán
Electronic wallets or e-wallets are defined as a technological tool through which currencies can be held and transferred on a virtual platform accessed through an application or website. Currencies stored in an e-wallet can typically be loaded via credit or debit cards or through cash payments to a centralizing bank account or other authorized merchant.
Electronic wallets have become increasingly popular because they facilitate e-commerce, streamlining payment procedures and reducing transfer costs for merchants and users affiliated with them, causing a proliferation of entities dedicated to offering electronic wallet services around the world.
Particularly in Latin America, this segment of financial and technological services (FinTech), has had an average annual growth of 36% since 2017, being the Fintech activity with the highest growth in the region.
FineTch Regulation in Guatemala:
In Guatemala, to date, there is no specific regulation for FinTechs, so entities engaged in these services are subject to the regulations applicable to any commercial company in Guatemala, i.e., they must comply with regulations regarding consumer protection, tax, civil and commercial obligations and against money laundering or other assets.
In 2019 the Superintendency of Banks introduced the SIB Innovation Hub platform, with the objective of strengthening the relationship between the Superintendency of Banks and entities that provide Fintech services. The SIB Innovation Hub offers advice on issues of financial legislation and money laundering or other assets and/or financing of terrorism, which may be useful to FinTechs, and simultaneously studies the Fintech environment in Guatemala and the risks associated with their activities. It should be noted that such interaction is not mandatory, and the SIB does not authorize the operation of Fintech entities.
Regulations applicable to electronic wallets:
As indicated above, in Guatemala the regulations governing the financial system do not expressly contemplate FinTech entities, among which are those that provide electronic wallet services; however, it is important to consider the following regulatory issues:
Anti-Money Laundering and Terrorist Financing Regulations:
The regulations that in Guatemala make up the system against laundering of money or other assets and against financing of terrorism are as follows:
a) Law Against Laundering of Money or Other Assets, Decree Number 67-2001 of the Congress of the Republic of Guatemala, and its amendments;
b) Regulation of the Law Against Laundering of Money or Other Assets, Governmental Agreement Number 118-2002, as amended;
c) Law to Prevent and Suppress the Financing of Terrorism, Decree Number 58-2005 of the Congress of the Republic of Guatemala;
d) Regulation of the Law to Prevent and Suppress the Financing of Terrorism, Governmental Agreement 86-2006;
e) Regulation of Measures and Minimum Requirements for the Reception of Foreign Currency, Annex to the Resolution of the Monetary Board number JM-108-2010;
f) Law of Extinction of Dominion, Decree Number 55-2010 of the Congress of the Republic of Guatemala, and its reforms; and
g) Regulation of the Law of Extinction of Ownership, Governmental Agreement Number 255-2011.
The aforementioned regulations establish, among others, the determination of individuals or legal persons that qualify as Regulated Persons before the Intendencia de Verificación Especial (“IVE”), as well as the obligations they must observe and comply with.
The Anti-Money Laundering Law establishes the list of activities that, if carried out by any individual or legal person, entail their registration as a Regulated Person before the IVE. The provision of electronic wallet services may be included in the list referred to as the activity consisting of the systematic or substantial transfer of funds and/or mobilization of capital by any individual or legal person”.
To date there is no definition or ruling to enable us to determine what is meant by “systematic” or “substantial” transfers; however, because of the nature of electronic wallets, their activity necessarily implies the carrying out of constant transfers of funds, and therefore the great majority of entities that provide such services are registered with the IVE as regulated entities.
The recommendation in this regard is that when in doubt as to whether or not the transfers of funds performed are substantial or systematic, an approach should be made to the IVE to determine whether or not it is necessary to register as an obliged person, and therefore to adopt all the obligations inherent in that status.
Regulations concerning banking agents:
The regulations governing banking agents in Guatemala are:
a) Law of Banks and Financial Groups, Decree Number 19-2002 of the Congress of the Republic of Guatemala, and its amendments;
b) Regulations for the Execution of Operations and Provision of Services through Banking Agents, Annex to Resolution JM-65-2010;
c) Regulation for the Provision of Mobile Financial Services, Annex to resolution JM-120-2011;
d) Authorization of the role of banking agents complementary to mobile financial services, Agreement 25-2011 of the Superintendency of Banks;
e) Regulation for the Management of Technological Risk, Annex to resolution JM-102-2011; and
f) Regulation for Operational Risk Management, Annex to resolution JM-4-2016.
In accordance with the aforementioned regulations, there are certain operations that can only be carried out by banking agents, such as: i) Receiving deposits and attending withdrawals from savings deposit accounts and monetary deposit accounts previously constituted in the contracting bank; ii) Making collections on behalf of third parties as provided in the contract; iii) Receiving and sending fund transfers; iv) Receiving payments of loans granted by the contracting bank; v) Receiving information and documentation from the public for the opening of monetary deposit and savings accounts and their subsequent transfer to the bank.
The activity described in the previous paragraphs is a regulated activity, therefore it is not allowed to be carried out by an entity not constituted as a banking agent. Becoming a banking agent entails incorporation in the country and being subject to a certain number of regulations, including indirect supervision by the Superintendency of Banks. Therefore, entities engaged in electronic wallet services need to act with caution so as not to incur in the activities described in this section.
Provisions related to cryptocurrencies:
According to Guatemalan legislation, “it is free to dispose, hold, contract, remittance, transfer, purchase, sale, collection and payment of and with foreign currency and shall be for the account of each individual or legal person, national or foreign, the profits, losses and risks arising from the operations of that nature performed”; however, it is worth noting that on February 19, 2021 the Superintendency of Banks issued a press release whereby it stated that cryptocurrencies:
are not considered legal tender in the country,
are not backed by the State of Guatemala,
are not considered foreign currency, are not guaranteed and cannot be
no one can be forced to accept them as a means of payment in transactions of goods and services.
The result of this is that, although it is true that cryptocurrencies are not expressly prohibited in Guatemala, nor is there a prohibition on electronic wallets handling cryptocurrencies, they are not part of the financial system and cannot enter it.
In conclusion, Guatemala still has a long way to go in terms of specific regulation applicable to FinTech and in particular to electronic wallets. This presents an interesting opportunity since it allows entities that provide this type of services a wide range of growth and experimentation within the Guatemalan legal framework; however, it also presents a challenge, since FinTechs must act with caution having a vision of all the dispersed regulations to which they are subject and be alert to regulatory developments that may exist in the future.
 IDB Invest, Fintech in Latin America and the Caribbean: A Consolidated Ecosystem for Recovery, April 2022.
 Article 18, numeral 5, paragraph c) of the Anti-Money Laundering Law, Congressional Decree 17-73 and its amendments.
 Article 1 Ley de Libre Negociación de Divisas (Law of Free Negotiation of Foreign Currency), Congressional Decree 94-2000.