Many new industries and sectors have emerged in the world where Fintech has made its mark.
One of these is Payment Service Provider Industry and Electronic Money Institutions It has gained a great foothold on Malta.
But what are they? How do they work? How are they regulated and how do they relate to Igaming’s incredibly successful world? This article provides information that can answer these questions.
Read more for more information.
- What are PSP and EMI?
- Connection between Igaming and PSP
- MFSA regulations
- The future of payment services
What are PSP and EMI?
So, first of all, what is a payment service provider (PSP)? PSP is a platform that provides shops with the ability to process payments over the Internet. The types of electronic payments included in PSPs Credit cards, verbal debits, real-time bank transfers.
Typically, PSPs use certain software as a service model to create a single payment gateway that connects all merchants with all available payment methods.
PSP can create a Connection between the acquisition bank and payment network And in most cases, PSPs manage technical connections as well as relationships between external systems and corresponding bank accounts.
This means that merchants have less dependence on certain financial institutions and have to spend time establishing these connections directly.
Using PSPs allows businesses to enjoy lower fees as they often form some of their banking transactions and make international business more accessible.
A full-service PSP can also provide client risk management services with transaction payment matching for payments. Fund transferreporting, and even fraud protection.
Another service that is generally offered is Multi-currency features and services. There are also PSPs that provide services that allow clients to handle next-generation methods such as cash payments, wallets, prepaid cards, vouchers and even electronic verification processing. Therefore, the term “PSP” is much broader than a payment gateway.
At the time of writing, there are over 900 payment providers worldwide, with the majority operating from Europe and North America. Malta is a Particularly popular EU jurisdictions For operation and setup of payment service providers.
EMI refers to Electronic money agency It is defined as a financial institution that is permitted to issue electronic money. Electronic money can be used to make payments to parties other than the issuer that holds it.
It should be stored remotely by an electronic airline or in an intensive accounting system. Although EMI is not a bank, it is still their business to receive funds and issue e-money exchanges as a balance of e-wallets. A good example is: Electronic gift certificate It is loaded with a certain amount of value that can be used as a form of payment at various points of sale on the Internet.
When referring to receiving funds, it is important to note that e-money purchasers must compensate the issuer in exchange for e-money. Therefore, loyalty scheme providers do not engage in activities that can be classified as electronic money institutions.
Malta has many fintech companies, many of which are EMI or PSPs. This is partly due to a large number of Igaming or some of the online gaming companies operating domestically and internationally.
Connection between Igaming and PSP
The IGAMING industry has been dominating Malta’s economy for the past decade. 2% of annual GDP. Hundreds of online casinos and affiliates operate domestically, so suppliers are thriving, but what is the relationship between IGAMING and PSP?
Any company that operates online casinos, online slots, or any type of online games requires a payment provider. To use an online casino, you usually need to sign up, log in, and then deposit your funds into the online account of the relevant service provider.
USUA’s payment methods include credit cards, debit cards, bank transfers, or providers such as Skrill, Neteller, and even Revolut. This is where the PSP enters the equation.
In such a highly regulated sector, security, trust and privacy are essential, so it is very important to use a highly reputable payment provider to process client payments. Also, as an industry lacks certain trust, a secure payment gateway will reassure clients and add another layer of trust to your business.
Most of these payment providers We can provide solutions to our clients This provides access to all standard payment methods in the market and one-time integration that supports a variety of currencies.
At the very least, IGAMING clients should be able to promote payments and withdrawals Euro, dollar, poundbank transfer via credit and debit cards (SEPA and SWIFT), and ideally a wallet like Neteller or Skrill.
MFSA regulations
Malta is Set up your PSPSand this is due to several benefits, such as inviting financial incentives granted not only to the company but also to shareholders who have chosen to move there and highly qualified expatriates.
Other benefits include passport rights and FI.ntech, igaming, and e-commerce The industry is thriving and offers many business opportunities for PSP providers.
The Financial Institutions Act regulates all financial institutions except banks. Malta Financial Services Bureau (MFSA) also issues several rules, collectively referred to as financial institution rules, governing the scope of work for financial companies.
According to regulations governed by the MFSA and related to the PSP, the following activities are permitted:
- A service that allows cash to be placed in a payment account for all operations necessary to operate a payment account.
- A service that allows cash withdrawals from payment accounts and all the work required to operate payment accounts.
- Issuance and/or acquisition of payment instruments.
- Money transfer;
- Performing a payment transaction if a telecommunications instrument sends the payer’s consent to a payment transaction, digitally or IT device and the payment is made to a telecommunications, IT system or network operator.
- Performing payment transactions where the fund is covered by the payment service user’s credit line:
- Implementation of account debits including one-time account debits.
- Performing payment transactions via payment cards or similar devices.
- Performing credit transfers, including standing orders.
- Performing payment transactions, including transfer of funds to a payment account with the user’s payment service provider or another payment service provider:
- Performing an account debit, including one-time direct debit.
- Performing payment transactions via payment cards or similar devices.
- Performing credit transfers, including standing orders.
Additionally, PSPs can also grant credits for payment transactions, foreign exchange services, custody activities, data storage, processing, operating payment systems, payment accounts used exclusively for transactions, and certain services.
Regarding regulations governing the operation of EMI in Malta, that is the next third schedule. Financial Institutions Act That’s the case. In Malta, EMI is permitted by the MFSA Issue electronic money whether it’s cryptocurrency or Fiat currency.
Under related regulations, Malta EMIs are permitted to engage in a variety of activities other than issuing electronic money, including payment services.
https://www.youtube.com/watch?v=GSPBKKTTQ1K
Other activities include:
- Services that allow cash to be placed in payment accounts and all the operations required to operate payment accounts.
- A service that allows you to withdraw cash from your payment account and manage all the necessary operations to operate your payment account.
- Performing a payment transaction that includes the transfer of funds to a payment account, such as a user’s payment service provider, or another payment provider, such as direct debit, card payment, credit transfer, or a standing order.
- Performing payment transactions in which the fund is covered by the payment service user’s line of credit.
- Issuance and/or Acquisition of Payment Instruments
- Money transfer
- If the payer’s consent is sent using telecommunications and the payment is made to the telecommunications network provider, the execution of the payment transaction will only serve as an intermediary on behalf of the payment service user.
The future of payment services
Blockchain-based payment platforms are likely to become a very prominent part of the future of PSPs. It’s likely they’ll do that take over Removes the need for an intermediary or third party to engage in the execution of the transaction from a bank-based transaction.
Blockchain is set up to revolutionize the way we trade and do business completely, and the payment services sector is no exception.
Many believe that we are just beginning to hurt the surface of blockchain possibilities when it comes to payments and there is still much to discover.
As of last year, Bitcoin’s market capitalization Beyond that of PayPal, such enormous growth is largely due to the level of security, transaction speed, and the convenience that blockchain technology offers. Even blockchain-based payment service providers and e-money institutions are expected to continue to grow, with a shift from the traditional model.
This does not necessarily mean that the use of Fiat currency will decrease, but instead we see an increase in the use of blockchain platforms as a way to encourage payments.
In the world Cross-border business is becoming the normThe temptation to pay instantly, free, or at least low cost proves too much to resist. We must also take into account the decline in trust in banks and governments and the fact that many individuals are attracted to this fact. Blockchain allows anonymous transactions No need for an intermediary or third party.
As Malta is about to add blockchain and cryptocurrency to its list of success stories, PSP and EMI will be made to support and collaborate with this exciting and disruptive new industry while leading the way for IGAMING and FINTECH.
One thing is certain, that Malta will be a true hotbed of innovation PSP, EMI, and Blockchain Technology. With a savvy and technically hearted government and a regulatory framework that supports and protects people in these industries, we can hope that all future developments will come from here.
