The Most Important Difference Between Payment Institutions & Electronic Money Institutions Which Nobody Knows

Payment Institutions in Serbia

In the last decade, the Republic of Serbia and the National Bank of Serbia managed to set up a complete regulatory framework relating to the provision of payment services and electronic money issuance.


In addition to ever evolving payment services and defining rules for their provision, Serbia established legal grounds for setting up and operation of payment and electronic money institutions, as new types of payment service providers.


Yet, in such context, one of the often asked questions is what is the difference between payment institutions (PI) and electronic money institutions (EMI)?


Before we get to the point, it is worth to recap that payment services in the Republic of Serbia may be provided by:


  • banks;
  • payment institutions;
  • electronic money institutions;
  • the National Bank of Serbia;
  • the Treasury Administration or other authorized public authorities;
  • the Public Postal Operator.


That said, the main difference between PI and EMI is that only Electronic Money Institutions can issue electronic money or digital currency such as a money balance recorded electronically on a stored-value card (pre-paid card) or account (e-wallet) or other devices.


On the other hand, Electronic Money Institution can offer all services otherwise offered or provided by licensed Payment Institutions.


To obtain a license for EMI, you have to provide relevant information about your e-money platform, including your e-money business in the form of a business plan, the payment services you may provide in the business plan, and the measures you have taken to safeguard the system.


The deadline for obtaining a license for PI or EMI in Serbia ranges from 3 to 6 months as of the company registration day.


So, if you intend to provide payment services or issue electronic money in Serbia, you will need to apply at the National Bank of Serbia (NBS) for a license, either as a Payment Institution or Electronic Money Institution.

Once licensed by NBS, PI can offer the following services:


  1. services enabling cash to be placed on a payment account, as well as all services required for opening, maintaining and closing the account; [capital requirement 125.000 euro]
  2. services enabling cash withdrawals from a payment account, as well as all services required for opening, maintaining and closing the account; [capital requirement 125.000 euro]
  3. services enabling cash withdrawals from a payment account, as well as all services required for opening, maintaining and closing the account; [capital requirement 125.000 euro]
  4. execution of payment transactions where funds are covered by a credit line for a payment service user, in one of the following ways [capital requirement 125.000 euro]:
    1. credit transfers,
    2. direct debits, including one-off direct debits,
    3. using a payment card or similar means;
  5. issuing and/or acquiring of payment instruments where the payment service provider enables to the payee the execution of payment transactions initiated by the payer by using a specific payment instrument; [capital requirement 125.000 euro]
  6. money remittance services where a payment service provider receives funds from a payer, without any payment accounts being opened in the name of the payer or the payee, for the sole purpose of making these funds available to a payee or of transferring these funds to the payee’s payment service provider, which makes such funds available to the payee; [capital requirement 20.000 euro] execution of payment transactions where the consent of the payer to execute a payment transaction is given by means of any telecommunication, digital or IT device and the payment is made to the telecommunication, digital or IT network operator, acting only as an intermediary between the payment service user and the seller of products or provider of services. [capital requirement 50.000 euro]


Before applying to become PI, there are also other concerns and conditions to be addressed or meet – such as corporate form, corporate seat, type of payment services business (e.g. check-out solution for online stores, etc.), adequate measures to safeguard payment service user funds, plans for obtaining a ‘safeguarding’ account with Serbian bank, etc.


In light of the above, the current Serbian legal framework regulates all types of payment services, starting from the basic all the way to the more technologically advanced ones.


To that end, it is the role of NBS to supervise all payment service providers and electronic money issuers in the part of their operations relating to provision of payment services and/or electronic money issuance.


On the other hand, all PI and EMI operating in Serbia must comply with the rules and the best practice to avoid issues and penalties with/from the regulator.

For more information on this or any other legal, tax or business topic, write to us at [email protected] at any time or call us at phone number +381113281914 every working day from 08:30 to 16 :30.

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