In previous months we wrote about the entry into force of the Regulation of Electronic Payment Service Providers (EPSPE). Now that the deadline has passed for companies in this area to adapt and register in the EPSPE registry, which for such purpose is kept by the Central Bank of Honduras, and based on our experience advising various clients in this administrative process, we consider it appropriate to make the following considerations that new companies wishing to register in the EPSPE registry should bear in mind.
In order to carry out this type of procedures, the Central Bank of Honduras has implemented an electronic platform through which representatives of the entity to carry out the process, or in their absence, their attorneys-in-fact, must enter general information such as RTN of the company, name of the entity’s contact with the Central Bank of Honduras during the registration process in the Special Registry, telephone and cell phone numbers, among others. Subsequently, the Central Bank of Honduras must send, by means of an email, an access link where the entity or its attorneys-in-fact may upload the documentation required as minimum requirements for the registration process.
We have used this electronic platform to register our clients, and we consider it to be a functional and innovative tool, since it is easy to use for users, response times tend to be shorter, and contact with the entity and its officials tends to be more direct, which facilitates the evacuation of queries and the presentation of the interpretation of the officials of the Central Bank of Honduras regarding the observations that are formed at the time of reviewing the application generated.
We also consider it important to mention the considerations and criteria of the Central Bank of Honduras with respect to the evaluation and interpretation of the minimum documentation required of entities seeking registration in the EPSPE registry. One of the requirements contemplates a sworn statement signed by each “partner, shareholder or administrator”.In practice, and making use of the discretion it has in relation to the requirements, we have found that the Central Bank is of the opinion that such requirement must be satisfied with the presentation of an affidavit by each partner/shareholder and each administrator. It is also worth mentioning that the Central Bank of Honduras is of the opinion that the concept of “administrators” applies to all the members of the Board of Directors of the petitioning company.
Another point to consider is the documentation requested on the security measures and controls implemented to mitigate the risks inherent to the business, including, but not limited to, the description of the technological infrastructure and cybersecurity measures that guarantee the confidentiality, integrity and availability of the information, documentation which, at the discretion of the Central Bank of Honduras, must be submitted countersigned by the legal representative of the company, or in his absence, the person responsible for security, information technology or equivalent. Likewise, even though it is not contemplated in the requirements mentioned in the regulations, the PCI DSS Certification of the company is requested, which certifies that it is certified in security matters for the management of online payments, keeping the user’s personal data safe.
In the cases referred to above, the Central Bank of Honduras makes use of its broad discretion in relation to the requirements it may request from the petitioners in order to ensure and verify that service providers comply with the security aspects of electronic transactions and data protection, since these are critical aspects in the implementation of this regulation.
The Central Bank of Honduras, through the Special Registry of Electronic Payment Service Providers, has managed to implement a different mechanism for the development of the process, in which the institution is in charge of being at all times during the process, and unlike other institutions, the contact that the Central Bank establishes with the entities requesting registration does not tend to be monotonous, since the officials are always available for the different queries from the entities requesting registration, either to clarify doubts, provide extension of notified orders or, failing that, to provide advice prior to starting the process of requesting registration in the Special Registry.
In conclusion and based on our experience, the implementation of these regulations by the Central Bank of Honduras has generally been positive. The Central Bank has provided petitioners with a technological method to facilitate registration in the EPSPE registry and has been open with its users so that they can comply with the requirements established by the regulations.With this, the Central Bank of Honduras ensures that it does not create a barrier to entry, but rather, significantly encourages the promotion of these types of businesses in the country, thus allowing various companies (domestic and foreign) in the fintech sector to be part of the innovation and continuous evolution of the sector and the improvement of the user experience.