Reserve Bank of SA issued a directive regarding the issuance of cards and the organization of acquiring within the jurisdiction. Through this directive, certain rules were introduced for those entrepreneurs who intend to obtain such a permit as a system operator license in South Africa, in particular for card issuers, card acquirers and organizations providing card acceptance services for transfers in the domestic market.
Provisions of directive aim to ensure the SA payment system is not threatened by domestic card service providers. It was the basis for the SARB to require the mandatory participation of local card issuers in the internal clearing system. In addition, local merchants must also use local card acquirers.
Contractual and legal requirements
A firm licensed as a system operator in South Africa – SO must have a separate agreement, drawn up in writing, concluded with each person for which certain services will be provided. Agreement is designed for following duties and rules for parties concluded it.
- This is an official obligation to comply with all the requirements and rules put forward in the framework of the provision of relevant services, which is spelled out in the Law.
- Ensuring appropriate problem and crisis supervision mechanisms, incl. escalation procedures.
- Ensuring efficient performance in terms of quality and service times.
- Establish a disaster recovery plan that outlines a mechanism to ensure the continuity of all functions for the beneficiaries.
- This agreement shall be governed by and construed according to provisions of the laws of SA. In case of any disputes and conflicts that could be reclassified as legal, the parties apply to the South African court of the appropriate instance. The parties undertake to follow what was issued and decided by the court.
With regard to the storage of information received from a client by a company licensed as a system operator in South Africa, company undertakes to do next-mentioned:
- to properly store all the records that were made in the course of providing the service, for the period established by the norms of the law;
- maintain the confidentiality of information about each person who becomes services’ customer. Only exceptions are cases when disclosure of such data is required by law.
Risk control requirements
The SO is required next-mentioned.
- Conscientiously and in a timely manner to comply with all reasonable measures in relation to risk management.
- Implement mechanisms necessary to contain risks.
- Timely and conscientiously implement the measures necessary to prevent certain risks, or reduce their impact, if their complete prevention is impossible.
- From time to time, test its own internal systems in order to identify and limit potentially unacceptable risks associated with operations/
- Actively cooperate with PASA and clearing house representatives to lead the development and implementation of better and more efficient procedures designed to implement risk management.
- Do not interact with firms or any other third parties that are not recognized and approved by PASA.
- Provide guarantees that the director of the firm and the board of directors have been fully informed of all these criteria. If necessary, a written report may be required.
A firm with a PSP license in South Africa undertakes to inform banking authority of all significant changes occuring in management system, nature of the activity and form of ownership of the firm. From time to time, other information may be requested by the bank, which must also be fully provided by the operator.
In order to carry out full-fledged activities, an enterprise that has a PSP license in South Africa needs to properly maintain accounting records and send fiscal statements to regulative authority for the annual period. In addition, these reports should be audited. The firm is also required to have adequate insurance against claims that may arise from beneficiaries or clients.
Our specialists are ready to provide you with professional assistance and support in obtaining a PSP license in South Africa. We also have a large selection of ready-made companies for sale. Contact us and we will provide you with comprehensive advice on all issues related to PSP activities in this jurisdiction.
You can see our current offers in the categories “Cryptocoins and licensing of cryptocurrency operations”, “Ready-made companies”, “Banks for sale” and “Licenses for sale”.