1. Payment Instruments and Services

• Direct debits: a payment service for debiting a payer’s payment account where a payment transaction is initiated by the payee based on the consent given by the payer to the payee, the payee’s payment service provider, or the payer’s own payment service provider.
• Credit transfer: a payment service for crediting the payee’s payment account by means of a payment transaction or a series of payment transactions from the payer’s payment account, executed by the payment service provider holding the payer’s payment account. payer, on the basis of an instruction given by the payer.
• Payment card: payment instrument represented by a card, on physical or digital media, issued by a PSP or an electronic money issuer that allows the user to use payment services. Payment cards can be: (i) prepaid or pay before cards; (ii) debit or pay now cards; (iii) credit cards or pay later.
• Acquiring of payment transactions: a payment service provided by a payment service provider that enters into a contract with the payee for the acceptance and processing of payment transactions, which results in a transfer of funds to the payee.
• Issuing of payment instruments: a payment service provided by a payment service provider that enters into a contract to provide the payer with a payment instrument to initiate and process the payer’s payment transactions.
• Payment transactions: the act, initiated by the payer or by his account or the payee, to place, transfer or withdraw funds, irrespective of any underlying obligations between the payer and the payee.
• Distance payment transactions: a payment transaction initiated via the Internet or via a device that can be used to communicate at a distance.
• Payment order: an instruction given by a payer or payee to his payment service provider to execute a payment transaction.
• PAYMENT INITIATION SERVICES (PIS): payment initiation services at the request of the user in relation to a payment account held by another payment service provider (activity referred to in point (g) of letter I) of Annex 1 of the LISF).
• Money remittance: a payment service where funds are delivered by a payer, without payment accounts having been opened in the name of the payer or the payee, solely for the purpose of transferring a corresponding sum to a payee or to another payment service provider acting on behalf of the payee, and/or where such funds are collected on behalf of the payee and made available to the latter (activity referred to in point (f) of letter I) of Annex 1 of the LISF).
• Payment services: the services referred to in point (I) of Annex 1 of the LISF.
• Type A payment services: the payment services referred to in points a), b), c), d), e) and f) of letter I) of Annex 1 of the LISF.
• Type B payment services: the payment services referred to in points g) and h) of letter I) of Annex 1 of the LISF.
• Payment instrument: a personalised device, including electronic money, and/or set of procedures agreed between the user and the payment service provider and used to place an order of payment.

2. Parties Involved and Intermediaries

• Agent: a natural or legal person who provides payment services on behalf of a payment service provider.
• Chief Executive Officer: member of the Board of Directors, however named, with delegated powers pursuant to Article 49, fourth paragraph, of the Companies Law.
• Head of the Executive Structure: General Manager or, in his absence, director with delegation to perform the functions of General Manager and any deputy manager, called to temporarily or occasionally take over the functions of head of the executive structure in the absence of the General Manager.
• Group leader: payment institution or electronic money institution or holding company meeting the requirements of Article 54 of the LISF and located within the group architecture in such a position as to ensure that the sum of its own balance sheet assets and those of the companies and entities controlled by it meets the condition required for the existence of a financial group.
• Customer or client or user: any person, whether natural or legal, who uses a payment service as payer or beneficiary or both, or the natural or legal person who holds the currency electronic.
• Components: companies or entities, other than the parent company, forming part of the group.
• Crypto-asset firm: financial undertaking as defined in Article I.I.2, paragraph 1 of Regulation no. 2024-03 on crypto-assets.
• Electronic money issuer: EMIs and, when issuing electronic money, banks, the Central Bank of the Republic of San Marino, as well as the State of San Marino, the Member States of the European Union or their respective regional or local authorities, where they act in as a public authority, i.e. the European Central Bank and the national central banks when they do not act in their capacity as monetary authorities or other public authorities.
• Institutions: electronic money institutions (or EMIs) and payment institutions, as defined below.
• Electronic money institutions or EMIs: undertakings, other than banks, authorised to provide the electronic money issuing services referred to in letter J of Annex 1 of the LISF.
• Payment institutions: undertakings, other than banks and electronic money institutions, authorised to provide one or more payment services referred to in letter I) of Annex 1 of the LISF.
• Payer: a natural or legal person holding a payment account who authorises the payment order from that payment account or, in the absence of a payment account, a natural or legal person who gives the payment order.
• Shareholders: persons who, directly or indirectly, i.e. as controlling persons of legal persons, hold significant shareholdings in the share capital.
• Payment service provider or PSP: payment institutions, institutions of electronic money and, when providing payment services, banks, the Central Bank of the Republic of San Marino, as well as the State of San Marino, the Member States of the European Union or their regional or local authorities, where they do not act as public authorities, or the European Central Bank and the national central banks when they do not act as monetary authorities or other public authorities.
• Third-party payment service providers or TPPs: payment institutions that provide only type B payment services.
• Payment service user: the natural or legal person who uses a payment service as payer, beneficiary or both.

3. Accounts and Information

• Payment account: an account held in the name of one or more customers which is used for the execution of payment transactions.
• Unique identifier: a combination of letters, numbers or symbols which the payment service provider indicates to the user and which the latter must provide in the context of a payment transaction in order to clearly identify the other user and/or his payment account.
• Data currency: the reference date used by a payment service provider to calculate interest on funds debited or credited to a payment account.
• AIS (account information services): account information services that provide online consolidated information in relation to one or more payment accounts held by the user with another payment service provider or with more than one payment service provider (activities referred to in point (h) of letter I) of Annex 1 of the LISF).

4. Security and Risks

• Authentication: a procedure that allows the payment service provider to verify the identity of a payment service user or the validity of the use of a specific payment instrument, including the use of the user’s personalized security credentials.
• Strong Customer Authentication: an authentication based on the use of two or more elements, classified into the categories of knowledge (something that only the user knows), possession (something that only the user possesses) and inherence (something that characterizes the user), which are independent, since the violation of one does not compromise the reliability of the others, and which is designed to protect the confidentiality of the authentication data.
• Operational risks: risks of losses resulting from inadequate internal processes, human errors, deficiencies in operating systems or events of external origin. These include, among others, legal risk, i.e. the risk of losses resulting from violations of laws or regulations, contractual or extra-contractual liability or other disputes, as well as reputation risk. Reputation risk can arise directly from certain events or behaviors (e.g. commercial policies perceived by customers as not paying attention to their interests) or indirectly from other types of risk (operational, credit, liquidity) with respect to which reputational effects can amplify the economic impact. Reputation risk can therefore result from both irregular behaviors and incorrect perceptions by customers or the market.
• Risks security: the risk arising from the inadequacy or lack of internal processes or from exogenous events that have, or could have, a negative effect on the availability, integrity and confidentiality of systems using information and communication technologies (ICT) and/or information used for the provision of payment services. This includes the risk arising from cyber attacks or from an inadequate level of physical security.
• Incident: a single event or series of linked unplanned events that has or is likely to have a negative impact on the integrity, availability, confidentiality, authenticity and/or continuity of payment services.

5. Contracts and Relationships

• Long-term contracts: contracts whose direct legal effects continue over time, with or without predetermined deadlines.
• Framework contract: contract that regulates the future execution of individual and subsequent operations and which may involve the obligation to open a payment account and the related conditions.
• Individual legal relationships iduable in block: credits, debts and contracts that have a common distinctive element found in the technical form, in the economic sectors of destination, in the type of counterparty, in the territorial area and in any other common element that allows the precise identification of a homogeneous complex of legal relationships.
• Economic relevance relationships: employment relationships or continuous or periodic relationships of a professional nature, or other “intuitu personae” relationships that influence the independence of the subject as a corporate representative of the institution.
• Invitation to conclude: proposal susceptible to pure and simple acceptance as it contains all the conditions of the contract, as an expression of a univocal will, which manifests a decision and not a mere availability or hope.

6. Authorities, Regulations and Supervision

• Central Bank: the Central Bank of the Republic of San Marino.
• Register of payment service providers or “Register”: the register referred to in Article 5 of the PSD2 Decree.
• PSD2 Decree: Delegated Decree 28 December 2018 n.177 “Provisions on payment services in implementation of Directive (EU) 2015/2366” and subsequent amendments.
• Sanctions Decree: Decree of 30 May 2006, no. 76 and subsequent amendments.
• Corporate Law: Law of 23 February 2006, no. 47 and subsequent amendments.
• LISF: Law of 17 November 2005, no. 165 and subsequent amendments.
• BCSM Statute: Law 29 June 2005, no. 96 and subsequent amendments.
• SEPA Regulation: Regulation no. 2024-04 issued by the Central Bank on 7 November 2024 and subsequent amendments.
• Supervisory reports: periodic and non-periodic surveys of information drawn up in accordance with company accounting data and/or management information supports which, within the scope of the powers of information supervision pursuant to Article 41, paragraph 1, of the LISF, are transmitted to the Supervision Department.

7. Shareholdings and Corporate Structure

• Shareholders in the capital: entities that, directly or indirectly, i.e. as controlling entities of legal persons, hold significant shareholdings in the share capital.
• Controlling shareholding: shareholding attributing control pursuant to Article 2 of the LISF.
• Significant shareholding: shareholding, with voting rights, exceeding 10% of the share capital.
• Controlling entities: natural persons, or, in their absence, entities of a different legal nature who, ultimately, also jointly with other entities, exercise, also through directly or indirectly owned companies, fiduciary interposition or other interposition, control over legal persons, pursuant to the LISF.
• Promoting entities: natural or legal persons who intend to acquire, on their own behalf, the share capital of an institution being established.
• Applicant entities: natural or legal persons who submit the application to the Central Bank aimed at obtaining authorization to acquire, on their own behalf, of significant shareholdings in the capital of already established institutions.

8. Technologies and Innovation

• Remote communication techniques: customer contact techniques canvas, other than advertisements, which may be used for the conclusion of a payment service contract or the issuing of electronic money and which do not involve the simultaneous physical presence of the customer and the payment service provider or the issuer of electronic money.
• Digital content: goods or services produced and supplied in digital format whose use or consumption is limited to a technical device and which do not in any way involve the use or consumption of physical goods or services.
• Electronic communications network: transmission systems and, where applicable, switching or routing equipment and other resources which allow the transmission of signals by wire, by radio, by optical fibre or by other electromagnetic means, including satellite networks, fixed and mobile terrestrial networks (circuit-switched and packet-switched, including the Internet), networks used for the broadcasting of sound and television programmes, systems for the transport of electricity, insofar as they are used to transmit signals, cable television networks, irrespective of the type of information carried.
• Electronic communications services: services normally provided for remuneration and consisting exclusively or mainly in the transmission of signals on electronic communications networks, including telecommunications services and transmission services in networks used for the broadcasting of radio and television programmes, but excluding services providing content transmitted using electronic communications networks and services, or exercising editorial control over such content; information society services (i.e. any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services) which do not consist wholly or mainly in the conveyance of signals on electronic communications networks are also excluded.

9. Electronic Money

• Electronic Money Issuer: EMIs and, when issuing electronic money, banks, the Central Bank of the Republic of San Marino, as well as the State of San Marino, the Member States of the European Union or their regional or local authorities, when acting as public authorities, or the European Central Bank and the national central banks when not acting as monetary authorities or other public authorities.
• Issuance of payment instruments: a payment service provided by a payment service provider who enters into a contract to provide the payer with a payment instrument to initiate and process the payment transactions of the payer.
• Electronic money institutions (EMIs): companies, other than banks, authorised to provide the electronic money issuing services referred to in letter J of Annex 1 of the LISF.
• Electronic money institutions with limited operations (EMIs with limited operations): EMIs subject to the following constraints: i. the average electronic money in circulation issued by them cannot exceed 5 million euros; ii. the electronic money issued by them for each customer cannot exceed the value limit of 500 euros; iii. operations abroad are precluded; iv. the provision of the ancillary activity of granting loans is precluded; v. the provision of payment services not connected with the issuance of electronic money is subject to the additional limits set for payment institutions with limited operations.
• Electronic money: the monetary value stored electronically, including magnetic storage, represented by a credit towards the issuer that is issued upon receipt of funds to carry out payment transactions and that is accepted by natural and legal persons other than the issuer.
• Average electronic money in circulation (MEMIC): average of the total amount of financial liabilities against electronic money issued at the end of each day during the previous six months calculated on the first day of the month following the end of the semester and applied to that month.
• Multi-brand co-badging: inclusion of two or more payment brands or payment applications of the same brand in the same payment instrument.
• Electronic money token: crypto-assets referred to in Article 2, paragraph 1, letter tt) of Delegated Decree 29 August 2024 no. 138 and subsequent amendments.

10. Crypto-Activity Services

• Crypto-asset firm: financial company as defined in article I.I.2, paragraph 1 of Regulation no. 2024-03 on crypto-assets.
• Crypto-asset services: the services indicated in letter L-bis of Annex 1 of the LISF.
• Electronic money tokens: crypto-assets referred to in Article 2, paragraph 1, letter tt) of Delegated Decree 29 August 2024 no. 138 and subsequent amendments.

11. Operational Structure and Governance

• Chief Executive Officer: member of the Board of Directors, however named, with delegated powers pursuant to Article 49, fourth paragraph, of the Companies Law.
• Head of the Executive Structure: General Manager or, in his absence, director with delegation to perform the functions of General Manager and any deputy director, called to temporarily or occasionally take over the functions of head of the executive structure in the absence of the General Manager.
• Corporate representatives: natural persons who hold the positions of director, auditor or head of the executive structure.
• Personnel in charge of organizational units: personnel in charge of significant organizational units and with significant decision-making and representation powers.
• Representative office: structure that the institute uses exclusively to carry out promotional activities and market research.
• Outsourcers: natural or legal persons to whom the institute outsources business functions or material activities integrated within the production processes typical.
• Branch of the company: branches and, in general, any homogeneous set of operational activities, to which contractual and employment relationships can be referred within a specific organizational structure.

12. Entities that can be exercised

1. The provision of PAYMENT SERVICES referred to in letter I) of Annex 1 of the LISF is reserved to banks, PAYMENT INSTITUTIONS and ELECTRONIC MONEY INSTITUTIONS. The CENTRAL BANK and the State may also provide PAYMENT SERVICES, in compliance with the provisions applicable to them, as well as, in ancillary terms, subject to specific authorization from the CENTRAL BANK and in compliance with the provisions of this Regulation, CRYPTO-ASSET FIRMS.
   
2. The issuance of ELECTRONIC MONEY is reserved to banks and ELECTRONIC MONEY INSTITUTIONS. The CENTRAL BANK and the State may also issue ELECTRONIC MONEY, in compliance with the provisions applicable to them.
   
3. By virtue of the provisions of the previous two paragraphs:
   
   a) PAYMENT INSTITUTIONS may provide one or more PAYMENT SERVICES in accordance with the content of their authorisation. They may carry out other activities as indicated in this Title. PAYMENT INSTITUTIONS are prohibited from carrying out the activity of issuing ELECTRONIC MONEY. PAYMENT INSTITUTIONS may only hold PAYMENT ACCOUNTS used exclusively for PAYMENT TRANSACTIONS;
   
   b) ELECTRONIC MONEY INSTITUTIONS may carry out the activity of ELECTRONIC MONEY and also provide PAYMENT SERVICES not connected with the issuance of ELECTRONIC MONEY detailed in the program of activities. ELECTRONIC MONEY INSTITUTIONS may carry out other activities as indicated in this Title. The ACTIVITY OF GRANTING FINANCING is permitted, in compliance with the conditions set out in Article II.II.3, exclusively in relation to the provision of PAYMENT SERVICES not connected with the issuance of ELECTRONIC MONEY.
   
4. The INSTITUTIONS may also provide, after obtaining specific and additional authorization from the CENTRAL BANK and in compliance with the relevant regulations, CRYPTO-ACTIVITY SERVICES. The release of the authorization to provide CRYPTO-ACTIVITY SERVICES is also subject to the CENTRAL BANK’s assessment of the relevance and coherence of the specific CRYPTO-ACTIVITY SERVICE that the INSTITUTE intends to provide with respect to the PAYMENT SERVICES and/or ELECTRONIC MONEY ISSUANCE SERVICES carried out primarily.
   
5. The issuance of ELECTRONIC MONEY TOKENS is reserved for banks and ELECTRONIC MONEY INSTITUTIONS that have the specific authorization from the CENTRAL BANK to carry out the reserved branch of activity consisting of the issuance of ELECTRONIC MONEY in the form of tokens, issued pursuant to Part III of this Regulation, in compliance with the provisions of the latter as well as the specific, or where otherwise established, different provisions of Regulation no. 2024-03 on crypto-activities.

Funding activity

1. The INSTITUTIONS, pursuant to Article 4, paragraph 4 of the LISF, as ancillary to the PAYMENT SERVICES referred to in points d) and e) of Letter I) of Annex 1 to the LISF, may also carry out the FINANCING ACTIVITY referred to in letter B of Annex 1 to the LISF, provided that all of the following conditions are met conditions:
   
   a) the financing is ancillary and granted exclusively in relation to the execution of a PAYMENT TRANSACTION;
   
   b) the financing is for a period not exceeding twelve months. Only financing granted in relation to payments made by credit card may have a duration of more than 12 months;
   
   c) financing is not granted using FUNDS received or held for the purpose of carrying out a PAYMENT TRANSACTION;
   
   d) in light of the credit risk arising from such financing, the INSTITUTE maintains the minimum capital endowment established in Part VII.

2. The accessory relationship with respect to the PAYMENT TRANSACTION referred to in the previous letter a), entails the impossibility for INSTITUTIONS, pursuant to Article 4 paragraph 2 of the LISF, to exercise the branch of activity constituted by the “issue of guarantees and signature commitments”.
   
3. All other reserved activities, with the exception of PAYMENT SERVICES, ELECTRONIC MONEY ISSUANCE, CRYPTO-ACTIVITY SERVICES, FINANCING GRANTING ACTIVITIES within the limits described above and, incidentally, EXCHANGE SERVICES, must be considered as not exercisable by INSTITUTIONS, pursuant to Article 4 of the LISF.

Other exercisable activities

1. INSTITUTIONS, in the provision of PAYMENT SERVICES, may carry out the following ancillary activities:
   
   a) provision of operational services and services strictly connected with the PAYMENT SERVICES provided, such as for example:

• guarantee of the execution of PAYMENT TRANSACTIONS;
• EXCHANGE SERVICES;
• custody, registration and processing of data;
  
  b) management of PAYMENT SYSTEMS.

2. ELECTRONIC MONEY INSTITUTIONS may also provide operational services and services strictly connected with the issuance of ELECTRONIC MONEY, such as for example:
   
   a) progection and implementation of procedures, devices and supports relating to the activity of issuing ELECTRONIC MONEY;
   
   b) provision, on behalf of third-party ISSUERS OF ELECTRONIC MONEY, of services connected with the issuance of ELECTRONIC MONEY.

Savings collection tools

1. INSTITUTIONS may collect savings from the public solely by issuing bonds, in compliance with the provisions of Title IV, Part II of Regulation no. 2007-07 of the collection of savings and banking activity.