Small Payment Institution in Poland – new

requirements
Starting from September 29, 2023, and continuing through January 1, 2024, and March
29, 2024, in Poland comes new regulations pertaining to SPI requirements. These
changes bring about substantial amendments to the Polish Payment Services Act,
introducing stricter regulations for Small Payment Institutions. The updated regulations
apply for:

● The registration process for Small Payment Institutions, which now includes
newly defined formal requirements.

● Reporting obligations of the Small Payment Institution.

The new process of registration of Small

Payment Institutions: What new documents do
you need?
The procedure for a Polish company to enter the Small Payment Institution Register
(acquiring an SPI license in Poland) underwent significant alterations. Now, when
applying for an SPI license, the applicant must submit the following documents along
with the motion:

1. The list of payment services which the Small Payment Institution intends to
provide, including the presentation of these services in the form of a graphic
diagram with a description of these services and the indication of the service
types listed in Polish Payment Services Act to which these services belong;
2. Description of organizational solutions, which allow:
a) calculation of the total monthly amount and payment transactions,
b) fulfillment of obligations related to anti-money laundering and counter-
terrorism financing as per the Polish AML Act.
3. Business activity program and financial plan covering a full 12-month period of
SPI’s operations, taking into account the transaction value limit requirement;
4. Risk management procedures to which SPI may be exposed;
5. Description of any business activity other than providing payment services;
6. Description of the method for safeguarding clients’ monetary funds.
Strategic Business Plan and Financial Projection
for a 12-Month Duration of Small Payment
Institution (SPI) Operations, Considering
Transaction Value Limitation

As per Article 117h(2)(1) of the Polish Payment Services Act, a Small Payment Institution is required
to have a program of operations and a financial plan for the first 12 months of its activity. The
program should ensure that the average total amount of payment transactions over the previous 12
months performed by the Small Payment Institution does not exceed the equivalent of EUR
1,500,000. It is important to have a well-drafted business plan that is correct in formal, factual, and
accounting terms.

Formal correctness refers to the completeness of essential elements and the layout of the content
according to minimum standards. Substantive correctness is primarily the accuracy of the data and
assumptions made, as well as their plausibility. This means that the initial data should correspond to
the actual state of affairs, and the assumed values should align with the rational, probable scenario
of the company's development in the given market and macroeconomic conditions.

Accounting accuracy involves the correct, orderly, and error-free presentation of financial statements
that show input data, output data, and the indicators and measures resulting from the compilation of
these data.

1. Strategic Assumptions:
● Identifying the fundamental assumptions guiding the strategic direction.

2. Marketing Plan, covering:

● Characteristics of the services provided.
● Characteristics of the target client group.
● Analysis of services offered by competing suppliers.
● Pricing strategy.
● Description of intended channels for distribution and promotion.

3. Operating Plan, including information on:

● Capital expenditures and their financing sources.
● Funding sources for operational activities.
● Implementation of legal and supervisory requirements.
● Policy on outsourcing payment services, detailing contractual rights and
obligations.
 ● Technology usage, incorporating IT systems architecture, security features,
transaction monitoring, data flows, software, and overall data and system
security.
● Information flow between parties involved in payment execution, and fund flow
between accounts, outlining the sequence in service provision.
● Organization and management plan, featuring organizational structure, powers of
organs or managers, employment policies, and internal regulations covering
corporate governance, internal control, accounting, and auditing.

4. Timetable detailing planned dates for achieving business milestones and strategic
objectives outlined in the business plan.

5.Financial Plan, encompassing:

● Revenues, costs, profits, and losses.
● Capital expenditures and requirements.
● Funding sources for operations.
● Cash flow, balance sheet, and financial evaluation.
● Assessment based on the statements of the financial plan and indicator
assessment.

These comprehensive elements contribute to a well-rounded and detailed framework for the
SPI's operations and financial success.

Description of organizational solutions

Under Article 117h(1)(1) of the Polish Payment Services Act, a Small Payment Institution is
authorized to conduct activities provided it has organizational arrangements capable of:

1. Calculating the total monthly amount of payment transactions.

2. Meeting obligations related to the prevention of money laundering and terrorist financing,
as per the prevailing legislation.

These measures must involve the establishment of a secure and comprehensive record, either
written or electronic, for each individual transaction. This record should include the transaction
amount and all relevant details crucial for Anti-Money Laundering and Countering the Financing
of Terrorism (AML/CFT) obligations, supported by necessary documentation. Furthermore,
these organizational solutions should streamline the processing of compiled data, enabling the
instantaneous generation of summaries. These summaries are designed to not only support the
activities of the Small Payment Institution (SPI) but also enhance the supervisory efforts of the
Polish Financial Supervision Authority.
Risk management procedures to which SPI may
be exposed
The Small Payment Institution must maintain a current procedure for managing the risks it might
encounter. This procedure should specifically outline and elaborate on the principles of:

● Risk identification;
● Risk analysis;
● Risk response planning;
● Risk monitoring and control.

Description of the method for safeguarding

clients' monetary funds
In accordance with Article 117o of the Polish Payment Services Act, the Small Payment
Institution is required to safeguard funds received from users, which includes funds
acquired through agents or other providers for the execution of payment transactions.
This obligation is governed by the stipulations outlined in Articles 78 and 80 of the
Polish Payment Services Act, as well as the regulations implemented on the foundation
of Article 79 of the Act. (Regulation of the Minister of Finance of 13 August 2012 on the
categories of assets and the maximum proportion of cash invested by national payment
institutions)

Summary
Starting September 29, 2023, until January 1, 2024, and March 29, 2024, Poland
introduces new regulations for Small Payment Institutions (SPI). These changes,
impacting the Polish Payment Services Act, bring stricter guidelines for SPIs, focusing
on the registration process, reporting obligations, and document requirements for
acquiring an SPI license.

The revised registration process necessitates additional documentation. When applying

for an SPI license, applicants must submit a detailed list of intended payment services,
an organizational description, a business activity program, and a financial plan spanning
12 months. This plan should consider the EUR 1,500,000 limit on the average total
amount of payment transactions, as outlined in Article 117h(2)(1).
Additionally, the SPI must implement robust risk management procedures and provide a
method for safeguarding clients' monetary funds, adhering to Polish Payment Services
Act regulations.

In summary, the new regulations emphasize comprehensive documentation, strategic

planning, and adherence to financial limits for SPIs, aiming to enhance transparency,
risk management, and client fund protection.

Reporting obligations
The recent amendments to the Polish AML Payment Services Act introduce new
reporting requirements for Small Payment Institutions (SPIs). Under these updates,
SPIs must now provide the Polish Financial Supervision Authority (KNF) with their IBAN
number and a copy of the bank account agreement. Furthermore, effective March 29,
2023, SPIs are obligated to establish a dedicated bank account exclusively for services
facilitating cash withdrawals from a payment account and all associated operations.

In addition, the pre-existing reporting obligations of SPIs, specifically concerning the

quantity and value of rendered payment services, must be itemized according to each
type of payment service offered. This modification aims to create a more detailed and
specific reporting structure.