CBI’s Framework for Payment Aggregators
CBI’s Framework for Payment Aggregators

CBI’s Framework for Payment Aggregators

CBI’s Framework for Payment Aggregators

The Central Bank of Iran has belatedly released its regulatory framework for the operations of payment aggregators, coming one step closer to completing its overarching vision for fintechs and cryptocurrencies.
Published on its website, CBI’s legal framework for payment aggregators–service providers through which e-commerce merchants can process their payment transactions without dealing with banks– was completed using active feedback from industry players.
It is the third document among the total of six documents that are to be published by the end of the next fiscal year in March 2019. 
The first and second documents dealing with payment initiators and facilitators were previously released whereas the next three, respectively dealing with account information managers, cryptocurrencies and fintechs offering loans and facilities are on the way.
In its new document, CBI emphasizes that “payment aggregators are in no way allowed to engage in banking and credit operations” defined by the financial decision-making body, Money and Credit Council. 
They are also forbidden from issuing any payment instruments, publishing electronic money and engaging in foreign exchange operations while accepting and transferring any payment instruments issued by any entity other than a bank has also been defined as a redline for them.
“Payment aggregators are obligated to adhere to laws concerning anti-money laundering and combating the financing of terrorism,” CBI said, adding that they are also obliged to keep a record of the activities of their sponsored merchants, including bills of their transactions and other contracts.
As payment aggregators are accepting entities in the electronic payment system, the responsibility of covering risks emanating from their activities and exerting supervision over their work falls to payment companies that clinch deals with the payment aggregators.
CBI in its document also notes that payment aggregators are only allowed to store their revenues in accounts approved by Shaparak, Iran’s payment settlement network, while they are tasked with supervising the performance of their sponsored merchants.
“The total volume of the operations of payment aggregator conducted under the supervision of a PSP in one day must not exceed an amount equal to twice the total shareholder’s equity of that payment aggregator,” CBI said, adding that such a thing will only become possible if the PSP has obtained the necessary guarantees or collaterals. According to CBI, sponsored merchants are banned from engaging in payment aggregator services and licensed aggregators must deal with any violating merchants. However, the supervisory power wielded by PSPs and aggregators “does not negate” the authority of CBI and Shaparak, which can directly intervene whenever it is necessary.
One important part of the regulatory framework related to feedback from fintechs is that payment aggregators have been allowed to devise their own fees based on the consensual agreements reached with sponsored merchants.
CBI said it acknowledged this request to honor free market principles and boost competition between players that would lead to higher quality services.
All payment aggregators are bound by law to operate within the framework devised by the central bank, lest they face disciplinary measures. 


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