Introduction: The International Financial Services Centres Authority (IFSCA) has ushered in a new era with the notification of the IFSCA (Payment Services) Regulations, 2024, on January 30, 2024. This press release delves into the key aspects of these regulations, highlighting their significance in the global financial landscape.
Detailed Analysis:
1. Framework Overview: The regulations delineate a comprehensive framework for entities seeking authorization from IFSCA to offer various payment services. These services encompass account issuance, e-money issuance, escrow services, cross-border money transfer, and merchant acquisition.
2. Empowering IFSC: By permitting these services to operate from IFSC, the regulations open avenues for financial institutions within IFSC to provide and receive a broad spectrum of financial services. This facilitates seamless money transfer between individuals, businesses, and other entities, enhancing the financial ecosystem.
3. Global Fintech Expansion: Indian fintech entities aspiring to extend their products globally find support in these regulations. IFSC becomes an ideal base for them to expand offerings to jurisdictions worldwide, fostering the growth of the Indian fintech sector on the global stage.
4. Reverse-Flipping Dynamics: The regulations facilitate the process of “reverse-flipping” for Indian fintechs with holding companies in foreign jurisdictions. Many such entities engage in providing one or more of the payment services enabled by these regulations, consolidating their international presence.
5. International Benchmarking: The regulations, comprising eight chapters and seven schedules, are meticulously benchmarked to international standards. Drawing inspiration from regulatory frameworks in Singapore, the United Kingdom, and the European Union, they align IFSCA with globally recognized practices in governing payment services.
Conclusion: The IFSCA (Payment Services) Regulations, 2024, signify a pivotal moment in the evolution of international financial services. Enabling a diverse range of payment services and aligning with global benchmarks, these regulations position IFSC as a hub for seamless financial operations, supporting both domestic and international players. Entities looking to navigate the evolving financial landscape can now leverage the opportunities presented by these forward-looking regulations. For more details, interested parties can refer to the complete text of the notified regulations on the IFSCA website.
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International Financial Services Centres Authority
PRESS RELEASE
IFSCA (Payment Services) Regulations, 2024 notified
The IFSCA (Payment Services) Regulations, 2024 was notified in the official gazette on January 30, 2024.
The regulations lay down the framework for entities providing the following payment services to seek authorisation from IFSCA :
a) Account issuance service ( including e-money account issuance service)
b) E-money issuance service
c) Escrow service
d) Cross border money transfer service
e) Merchant acquisition
By enabling the above services to be provided out of IFSC the regulations allow financial institutions in IFSC to provide as well as receive a wide range of financial services that facilitate the transfer of money between individuals, businesses, and other entities. The regulations would also permit Indian fintech entities looking to offer their products globally to develop IFSC as their base from which to expand their offerings to jurisdictions across the world. The regulations would also support the process of “reverse-flipping” as many of the Indian fintechs having holding companies in foreign jurisdictions are engaged in providing on or more of the payment services enabled by the regulations.
The regulations are divided into eight chapters and seven schedules and have been benchmarked to international regulations governing payment services in jurisdictions like those in Singapore, United Kingdom and European Union.
The complete text of the notified regulations is available on the IFSCA website at https://ifsca.gov.in/Legal/Index/ogGPf3wx5GE=.
Entities interested in seeking authorisation under the regulations may apply to IFSCA.
Gandhinagar
February 1, 2024
