The National Bank of Serbia has invested significant efforts to harmonize national regulations in the field of payment systems with those of the EU.
As a result of these efforts, on December 18, 2014, the National Assembly of the Republic of Serbia adopted the new Law on Payment Services. The Law introduces significant improvements to the existing system, modernizing and aligning it with the directives of the European Union (Directive 2007/64/EC on payment services in the internal market, Directive 98/26/EC on settlement finality in payment and securities settlement systems, and Directive 2009/110/EC on the taking up, pursuit, and prudential supervision of the business of electronic money institutions), creating a harmonized, modern, and comprehensive set of rules for the provision of payment services at the EU level. A set of provisions in the Law will apply once the Republic of Serbia becomes a member of EU.
The Law creates the legal basis for the establishment and operation of electronic money institutions for the first time. Electronic money has been introduced and its issuance regulated.
Electronic money may be issued only in accordance with the Law, and – according to the Law – only by the following entities: (i) a bank; (ii) an electronic money institution; (iii) a public postal operator; (iv) the National Bank of Serbia; or (v) the Treasury Administration or other public authority body in the Republic of Serbia, in line with competences established by law. No other person may issue electronic money in the Republic of Serbia, which means that in the private sector only banks and electronic money institutions are able to issue electronic money. Electronic money institutions or banks can operate by themselves, through a branch, or through third parties.
An electronic money institution, under the Law, is a legal entity with its head office in the Republic of Serbia that is licensed by the National Bank of Serbia to issue electronic money in accordance with the Law. During the process of obtaining the license to issue electronic money from the National Bank of Serbia and on the day the license is granted, the initial capital of the entity applying for the license needs to be no less than the dinar equivalent of EUR 350,000 at the official exchange rate. Even though there is a list of additional conditions that need to be met in order to issue electronic money, this one is the most specific. The National Bank of Serbia must decide on an application for a license to issue electronic money no later than three months following the day of receipt of a duly completed application. The register of electronic money institutions is maintained by the National Bank of Serbia.
Relations between the electronic money issuer and the individual to whom electronic money is issued are contractually regulated, particularly in connection with the issuance and redemption of electronic money and all fees that the electronic money issuer charges to the electronic money holder in the process. Electronic money related services must be advertised in a clear and comprehensible way, and the advertising must not contain inaccurate information or information that may mislead electronic money holders regarding the terms of use of these services. Furthermore, electronic money holders need to be fully informed of all terms and conditions prior to conclusion of the contract.
So far there is only one electronic money institution registered in the Republic of Serbia, which is why this is a good time to initiate this kind of business on the Serbian market. The focus of this sole existing company is on e-commerce, which leaves a lot if space for other activities in this area. Because electronic money is relatively new in the Republic of Serbia, establishment of an electronic money institution at this point could lead to a leading place on the market and the opportunity to develop business activities of this kind in Republic of Serbia.