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Harmonisation of Serbian Law on Payment Services with PSD2

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The Parliament of the Republic of Serbia recently adopted amendments to the Law on Payment Services (“Law”) that will start to apply from 6 May 2025 (“Amendments”). By the Amendments, the Law is harmonised with the EU’s PSD2. The key goal of the Amendments is the enhancement of innovations on the market and securing increased competition and transparency in the area of payment services, as well as better protection of payment services users and payment security. Below we provide an overview of the main novelties brought by the Amendments.

The most important novelty is the introduction of the open banking concept and two new types of payment services:

  • Payment initiation service (“PIS”), which is a service to initiate a payment order at the request of the payment service user with respect to a payment account held at another payment service provider. The PIS essentially allows consumers that shop online to pay for their purchases through a simple credit transfer from their payment account. In the context of online payments, they constitute an alternative to credit card payments.
  • Account information services (“AIS”), which is an online service to provide consolidated information on one or more payment accounts held by the payment service user with either another payment service provider or with more than one payment service provider. The AIS enables users to have a global view of their financial situation, as well as to categorise their spending according to different typologies (food, energy, rent, leisure, etc.).

PIS and AIS may be provided by the existing types of payment services providers (banks, e-money institutions, payment institutions and public postal operators), whereby the Amendments prescribe additional more flexible rules for entities intending to provide only the AIS (for example, unlike standard payment institutions, the AIS provider may be established as an entrepreneur). Such AIS providers are registered in the registry of payment institutions. Banks generally have to enable PIS and AIS service providers access to the payment service user’s payment accounts, with limited grounds for refusal with notice to the regulator such as unauthorised access to the account or initiation of a payment transaction or fraud.

Another notable aspect of the Amendments concerns the exemptions from the application of the Law. Among others, the so-called “commercial agent exemption”, ”limited network exemption” and “electronic communication exemption” have suffered changes. 

  • The commercial agent exemption no longer leaves room for different interpretations in terms of whether the agent may act for both parties; from now on it is clarified that the agent may act either for the payor or the payee, but not for both parties.
  • The limited network exemption is now confined to services based on specific payment instruments that can be used only in a limited way if one of the following conditions is met: (i) instruments allowing the holder to acquire goods or services only in the premises of the issuer, or, under direct commercial agreement with such issuer, within a limited network of sellers of goods and services; (ii) instruments which can be used only to acquire a very limited range of goods or services; (iii) instruments issued upon a request of a company or a public sector entity and regulated by a state authority or another public authority for specific social or tax purposes, whereby they may be used only in Serbia and to acquire specific goods or services from suppliers having an agreement with the issuer. Providers of the services under (i) and/or (ii) for which the total value of payment transactions during the previous 12 calendar months exceeds EUR 1 million in RSD counter value are obliged to notify the National Bank of Serbia (“NBS”) until 15th of the current month about their activities and the reasons why these services fall under the exemption. Based on the notification, the NBS decides on whether the services are exempted.
  • The electronic communication exemption has been changed to set clear rules on when the electronic communication networks or operators may process payment transactions as additional services. Payment transactions which fall within the scope of this exemption are payment transactions for the purchase of digital content and voice-based services, regardless of the device used for the purchase or consumption of the content or services, and payment transactions performed from or via an electronic device within the framework of a charitable activity with participation of registered humanitarian organisations or for the purchase of tickets, whereby in each of these cases the amount is charged from the subscriber together with the electronic communication services provided. The value of any single payment transaction may not exceed RSD 6,000, and the cumulative value of payment transactions initiated by an individual subscriber may not exceed RSD 36,000 in a calendar month. Service providers relying on this exemption must notify the competent authorities, and provide to them at least once a year an opinion of a competent auditor that its activity is in line with the above rules.

For foreign e-money issuers which process payments for Serbian residents the regime remains mostly the same – they are obliged to notify the NBS prior to providing such services. It is now expressly prohibited to local payment service providers to execute payments transactions of local residents with the foreign e-money issuer which is not registered with the NBS. Already registered foreign e-money issuers have to supplement the information provided to the NBS with their e-mail address to be used for exchange of notices with the NBS.

The Amendments also bring a regulatory sandbox mechanism for testing new types of services without complying with the regulatory requirements and incurring associated costs. Specifically, the NBS may prescribe closer conditions under which a company or a payment service provider may be exempted from the application of all or specific provisions of the Law in a defined period, for testing of the service, if such service is by nature such to contain a certain degree of innovation due to which it could be considered as new or significantly enhanced payment service compared to payment services already provided in Serbia. Such bylaw has not yet been adopted by the NBS, however, this may be expected as part of the continued policy of the regulator to encourage innovations in the payment services area. 

The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.

By Maja Jovancevic Setka, Partner, and Dimitrije Ilic, Associate, Karanovic & Partners