FIN-FSA is mapping invoicing service companies’ operating models and potential need for licensing

The Financial Supervisory Authority (FIN-FSA) has found that there are several companies on the markets offering employment services and related invoicing services as a platform service. According to information obtained by the FIN-FSA, in many of these cases, there are grounds to suspect that the activity has been organised in a way where the company functions as a payment facilitator between the person performing the work and the orderer of the work, transferring the payment from the buyer to the seller, i.e. from the orderer of the work to the person performing the work. The persons performing the work, i.e. payees, may be private individuals or companies of any form of incorporation.

It is possible that many of the companies concerned include payment services requiring licensing in their operating model. Payment service subject to licensing is governed by the Payment Institutions Act (297/2010). A typical example of the provision of payment service is a service where the provider receives funds belonging to other parties in order to transfer them further. A party providing this type of service must have a license referred to in the Payment Institutions Act unless it has outsourced the payment service activity to another provider in such a way that it does not hold funds belonging to other parties.

The provision of payment service involves special regulation concerning the organisation of activities, such as the obligation to safeguard client funds, which is usually fulfilled by depositing client funds on a client fund account in a credit institution. The provider must also consider requirements concerning the prevention of money laundering and terrorist financing, requirements concerning the management of its operational risks and requirements concerning the reliability of the company management.

Over the next weeks, the FIN-FSA will contact invoicing service companies operating on the markets with a request for clarification. With the request for clarification, the FIN-FSA will map invoicing service companies’ operating models and potential need for licensing.

For further information, please contact:

Specialist Sohvi Nikkanen
09 183 5043
sohvi.nikkanen@finanssivalvonta.fi

Senior supervisor Juha Eerikäinen
09 183 5322
juha.eerikainen@finanssivalvonta.fi

Senior supervisor Mirja Kaspianranta
09 183 5569
mirja.kaspianranta@finanssivalvonta.fi

Payment service providers - Authorisation and registration - www.finanssivalvonta.fi

Payment service providers - Banks - www.finanssivalvonta.fi

Regulation - Payment service providers - www.finanssivalvonta.fi