Notification obligation of the limited network exclusion of the law on payment services
The CSSF would like to raise awareness that according to the Law of 10 November 2009 on payment services (hereinafter the “Law on payment services”), it is prohibited that natural or legal persons that are neither payment service providers nor explicitly excluded from the scope of the Law on payment services provide payment services in Luxembourg. It results that anyone who provides payment services in Luxembourg needs to be authorised or registered.
Certain activities are however, when certain conditions are fulfilled, excluded from authorisation or registration but may be subject to notification requirements. Service providers, e.g. gas stations, shopping centers, retail chains, etc., that are proposing payment instruments e.g. debit cards, credit cards, online wallets, gift cards, etc. or any other personalised device(s) and/or set of procedures agreed with the client (i.e. the payment service user), that can only be used in a limited way may indeed be excluded by the “limited network exclusion”, if the conditions provided by the Law on payment services are met.
According to the Law on payment services1 payment instruments are considered to be used in a limited way, if they constitute:
- instruments allowing the holder to acquire goods or services only in the premises of the issuer or within a limited network of service providers under direct commercial agreement with a professional issuer; or
- instruments which can be used only to acquire a very limited range of goods or services.
Service providers are legally obliged to notify the CSSF on these specific payment instruments, if the total value of the payment transactions executed through such payment instruments or made with monetary value issued in any period of 12 months exceeds €1 million.
The notification to be addressed to the CSSF (firstname.lastname@example.org) must thus contain:
- a description of each service provided in Luxembourg that is considered to fall within the limited network exclusion;
- the exclusion according to which the services are exempted;
- as well as the indication of the total value of payment transactions executed or made with monetary value issued over the preceding 12 months.
In order to facilitate this reporting for the service providers, a notification form has been made available on the internet site of the CSSF (cf. below).
This notification should be completed and submitted to the CSSF no later than one month from the date on which the aforementioned conditions are met.
If the CSSF comes to the conclusion that the notified services fall within the limited network exclusion as provided by the Law on payment services, the CSSF2 will inform the European Banking Authority (“EBA”) of the services that have been notified, specifying under which exclusion the activity falls and this description will be publicly available via the public register of the CSSF3 .
On the basis of the notification, the CSSF shall take a duly motivated decision where the activity does not qualify as a limited network, and inform the service provider accordingly. In this context, the CSSF will contact the service provider in order to determine whether a payment or electronic money licence would be necessary.
It has to be noted that notifications must be made every 12 months while the conditions are fulfilled.
1 Article 3 point (k)
2 Article 3-1 (3) and (4)
3 Article 36