Payment Services Supervision Act (ZAG)

Introduction

The Payment Services Supervision Act (Zahlungsdiensteaufsichtsgesetz – ZAG) is a key set of regulations in the German financial sector relating to payment services. It establishes the legal framework for payment service providers and aims to promote competition, increase the security of payments and strengthen consumer protection. In this article, we will examine the structure of the ZAG, its main contents, areas of application and significance for the financial sector.

What is the Payment Services Supervision Act (Zahlungsdiensteaufsichtsgesetz – ZAG)?

The ZAG was introduced as part of the implementation of the EU Payment Services Directive into German law. It regulates the supervision of payment service providers that are not credit institutions and sets out the requirements and obligations for these entities.

Structure of the ZAG

The ZAG is divided into several parts that deal with different aspects of payment services:

Part 1: General provisions

This part contains basic definitions and establishes the scope of the law.

Part 2: Permit obligation, provision of payment services

This regulates the requirements for granting a license to provide payment services and the requirements for business organization.

Part 3: Execution of payment services

This Part contains rules on the provision of payment services, including the rights and obligations of payment service providers and payment service users.

Part 4: Supervision of payment service providers, cooperation with other bodies

This sets out the rules for the supervision of payment service providers and cooperation with other bodies, including the European Central Bank.

Part 5: Rules on fines, transitional and final provisions

This part contains provisions on fines for violations of the ZAG as well as transitional and final provisions.

Main contents of the ZAG

Permission required

Payment service providers require a permit from the German Federal Financial Supervisory Authority (BaFin) to offer their services. The ZAG sets out the requirements for the granting of this permission.

Requirements for the business organization

Payment service providers must meet certain requirements for their business organization, including the implementation of risk management systems and internal control procedures.

Implementation of payment services

The ZAG contains detailed regulations on the performance of payment services. These include information obligations to customers, the execution of payment orders, liability for unauthorized payment transactions, and rights and obligations in connection with the use of payment instruments.

Supervision and control

The ZAG lays the foundations for the supervision of payment service providers by BaFin. This includes auditing management, business organization and compliance with legal requirements.

Sanctions for violations

In the event of violations of the ZAG, sanctions such as fines or, in extreme cases, the withdrawal of the license to provide payment services may be imposed.

Significance of the ZAG for the financial sector

The ZAG is of central importance for the regulation of payment services in Germany. It helps to promote fair competition between traditional banks and new payment service providers. At the same time, it is intended to increase the security of payment transactions and strengthen consumer protection.

Challenges and developments

With the rapid development of financial technology and the emergence of new payment methods and services, payment service providers must constantly adapt to meet regulatory requirements. The ZAG is therefore regularly revised to respond to new challenges and developments in payment transactions.

Conclusion

The Payment Services Supervision Act is a complex set of rules that plays a central role in the regulation of payment services in Germany. It establishes the legal framework for payment service providers and aims to promote competition, increase the security of payments and strengthen consumer protection. It is essential for payment service providers to be fully aware of and comply with the provisions of the ZAG in order to avoid sanctions and maintain the trust of customers and the public.