According to DLK Legal, “Digital Virgo is a multinational group present in more than 40 countries worldwide. Digital Virgo provides Direct Carrier Billing solutions, which allow customers to pay for their purchases via their mobile subscription as part of their monthly bill or as prepaid cards. The e-money institution license will allow the group to expand its service range.”
The DLK team was led by Partner Krzysztof Korus and included Lawyers Szymon Zych, Mikolaj Cegłowski, and Aleksandra Ksiezak. Below, we speak to them about this transaction.
What are the steps involved behind obtaining an e-money licence?
Szymon Zych: “The process can be divided into two stages: prior to, and after the submission of an application for an e-money institution (EMI) licence. The former requires the provider to carefully examine the services it intends to provide and ensure it meets all regulatory requirements. An experienced legal adviser is crucial at this stage. After the submission, competent authorities usually initiate a dialogue with the provider and request additional documents and information, trying to understand the business and regulatory model of the services.”
What challenges may arise when trying to obtain a licence?
Szymon Zych: “The more prepared the client is in the first stage, the smoother the communication is with the competent authority. Our goal is to predict the questions and doubts of the regulator in order to ensure a consistent regulatory model and reduce the total time of the procedure.
“Two issues are particularly important: a collection of documents about shareholders and managers (especially where companies with complex ownership structures are concerned) and an accurate description of the payment services.”
How do you work around these issues?
Krzysztof Korus: “Obtaining the licence requires a great deal of effort and responsibility on the part of the regulator, provider, and legal counsel, as well. Our participation in the project usually begins with providing support in designing business models. It usually requires a good understanding of technical processes, IT environment and business architecture.
“Subsequently, we assist the provider in preparation of all the documents required to apply for a licence. The process continues down to submitting an application and then providing support in answering the inquiries of the regulator. The key issue is the proper flow of information between all interested parties.”
Can you share more about the benefits behind obtaining an e-money licence (EMI)?
Krzysztof Korus: “The EMI licence opens the opportunity to provide services in each and every country in the European Economic Area. EMI can issue e-money and provide both traditional payment services (i.e. online wallets, acquiring, issuing of payment cards), as well as the ones regulated under PSD2 (payment initiation services, account information services). It is the broadest licence on the payment services market, next to banks. Obtaining a bank licence, however, takes much more time and efforts, while most of the modern business models may be successfully implemented through EMI.”
