THE National Payments System Bill 2018 was on Thursday read for the first time in the National Assembly by Finance Minister Winston Jordan.

The bill, No. 4 of 2018 seeks to introduce legislation for the establishment, regulation and oversight of a National Payments System (NPS). PART 11 of the bill provides for the establishment of a National Payments System Council and sets out the general powers and duties of the said Council. Additionally, the bill outlines the operational role of the bank in relation to the NPS.

The third part of the bill speaks to the licensing of payment service providers and systems operators.
The bank is also given the power to impose individual conditions for the operation of systems and the provision of services, ask for information, and agree with the individual operator or payments service provider on limitations in the activity or specific protective measures or impose sanctions and withdraw the relevant licence.

Meanwhile, PART IV provides for the ongoing oversight by the bank. These powers are defined as broad and general to permit the Bank of Guyana to diversify the levels of control according to each specific sector of the National Payments System.

According to the explanatory memorandum, the power to audit, have access to all records and information, examine and inspect where necessary for the oversight of systems and payment service providers are all provided for. Clause 17 provides that the bank has the power to adopt measures of a general or individual nature.

PART V provides for the establishment of rules of a system. It notes that once a system is authorised or its operator licensed by the bank it is consequently overseen by it. The National Payment System makes its operational rules enforceable against third parties.

Consumer protection is also taken into consideration by the legislation with Clause 29 including provisions for the transparency of fees charged by a payment service provider. On the other hand, Clause 30 provides that payment service providers should disclose the terms and conditions of a payment service in a manner clearly understood by the consumer, at the time the consumer contracts for the payment service.

Additionally, the bill outlines guidelines regarding the outsourcing and use of agents. It is a requirement that the bank wants payment service providers or operators to seek approval from the bank before outsourcing any operational function.

It states that an operator or payment service provider shall not outsource an aspect of the operation of its system or the provision of its payment service without prior written authorisation of the bank. It also states that a payment service provider seeking to provide payment services to a consumer through the use of agents shall submit to the bank an application for approval. Operators and payment service providers remain fully liable for any acts of their agents or entities to which activities are outsourced.

SETTLEMENT, NETTING AND FINALITY OF PAYMENT
Part VIII of the bill relates to settlement, netting and finality of payment and also applies to collateral used for providing liquidity in the system. Clause 37 provides that transfer orders and their netting shall be legally enforceable within the jurisdiction of Guyana and binding on third parties. This part is intended to protect against systemic risk and reflect international best practices for ensuring completion of daily operation.

PART IX provides for the winding up and administration of a system operator or participant. This part regulates the effects of bankruptcy over licensed systems. This part is intended to ensure that the daily operations of a system duly overseen by the bank are protected from any liquidation or winding up procedure.

PART X lays out the provisions affecting cheques and makes provisions to the processing of cheques by electronic means and on the use of cheque images and their enforceability under any circumstance.

Meanwhile, PART XI provides for the legal recognition of electronic records and electronic signatures.

Clause 48 provides that electronic funds transfers and records of electronic funds transfers are enforceable and may be used as evidence while Clause 49 outlines additional conditions with which a payment service provider should comply to obtain a licence for the issuance of electronic money.

PART XII lays out infringements, administrative measures and penalties while noting that the bank has the power to withdraw licences or suspend activities of payment service providers or operators.

PART XIII sets out the provisions for the settlement of disputes by arbitration along with transitional provisions for existing entities providing a payment service or operating a system or any participant or its officers conducting such business.

Clause 53 provides for immunity from lawsuit for supervisory staff. Clause 55 also provides that the bank may make such regulations, orders, notices or guidelines as may be required from time to time for carrying into effect the provisions of this Act, including on specific issues on payment orders and fund transfers executed by electronic means.