Fintech regulatory framework in Honduras
The activity of financial technology companies (FINTECH) has reported considerable growth in recent years in Honduras. The FINTECH Ecosystem has come to change the traditional way of doing business and continues to develop. These platforms generate benefits, opportunities, and efficiencies in service delivery, which has led to increased competition, reduced costs, and a better customer experience. However, the new technology also brings with it new risks from a regulatory point of view, risks that are being minimized by issuing new laws on the subject to protect the financial consumer.
Since 2016, the Regulation for the Authorization and Operation of Non-Banking Institutions that Provide Payment Services Using Electronic Money has been in force in Honduras, which regulates the authorization and operation of private and public non-banking institutions that carry out transfers and payment transactions of goods and services through the use of mobile devices, with resources of their users, transformed into electronic money, in the national territory and online.
At the end of the year 2021, Legislative Decree No. 83-2021 is published, which aims to regulate the organization, operation and functioning of domestic and foreign legal entities that provide payment and transfer services to residents in Honduras, it also provides that such legal entities must obtain the authorization of the Central Bank of Honduras (BCH, for its acronym in Spanish) or register in the Registry maintained for such purpose by said Institution, being under the surveillance of the BCH and subject to the supervision of the National Banking and Insurance Commission (CNBS, for its acronym in Spanish) or the corresponding supervisory entity, therefore, with the entry into force of the Decree, the BCH had to issue the pertinent rules and regulations to regulate the activities of payment and transfer services and other related aspects. By virtue of the provisions contained in the aforementioned Decree 83-2021, the Central Bank of Honduras issues the Regulations for Payment and Transfer Services Using Electronic Money and the Regulations for Services Offered by Electronic Payment Service Providers, both published in the Official Gazette on August 26th, 2022.
The purpose of the Regulations for Payment and Transfer Services Using Electronic Money is to regulate the organization, operation and functioning to be observed by legal entities that provide, within the national territory, payment and transfer services using electronic money.
The purpose of the Regulations for Services Offered by Electronic Payment Service Providers is to regulate the organization, operation and functioning of domestic and foreign legal entities that provide electronic payment and transfer services in the national territory through technological platforms, as well as the creation and management of the registry of such legal entities to facilitate compliance with financial inclusion and stability and user protection policies, aimed at providing the population with greater access to payment and financial services.