The risks associated with the operations of small payment institutions call for a response, but they do not necessarily call for the complete elimination of small payment institutions. The Polish Financial Supervision Authority’s proposal was discussed for Rzeczpospolita by Julita Zawadzka, PhD, attorney at law and a senior associate in the Banking, Finance, and Business Insurance Practice, at KKG Legal.
Eliminating SPIs Would Also Affect Entities Operating Lawfully
The structure of small payment institutions is sometimes exploited, which is why the Polish Financial Supervision Authority’s concerns are justified. However, there are also entities operating in the market that comply with the law but, due to the scale of their operations, are unable to meet all the requirements applicable to domestic payment institutions.
Furthermore, SPI status remains an option available to entities in the early stages of development. Some of them have already incurred significant costs and made substantial investments in connection with the launch of their operations. The complete removal of this model from the market would therefore affect not only entities that have raised regulatory concerns.
According to Julia Mysłowska, attorney at law, the response to the problems identified by the Polish Financial Supervision Authority (KNF) should be to eliminate the identified risks while preserving the possibility of operating as an SPI.
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