Industry Funding Levy Information for Payment Institutions and E-Money Institutions
Category N - Payment Institutions and E-Money Institutions
Up to 2019, the methodology for calculating levies payable by Payment Institutions and E-Money Institutions applied a banded or tiered approach to pricing, using thresholds to distinguish between firms based on size and risk. The completion of a review of the Central Bank’s Payment Institutions and E-Money Institutions Impact PRISM models in 2020 resulted in changes in impact categories. This presented an opportunity to review the levy methodology to ensure that regulatory costs are recovered in a manner that is proportionate to the size and risk of firms, that threshold effects are addressed and to take account of different business models and the separate and significant prudential, conduct and anti-money laundering / terrorist financing risks (AML /CTF) that can apply.
On 16 February 2021, the Central Bank published a consultation paper seeking views on a revised methodology for calculating the Industry Funding levy payable by Payment Institutions and E-Money Institutions. View the Consultation on New Methodology to Calculate Funding Levies payable by Payment Institutions and E-Money Institutions.
On the expiry of the consultation period on 16 April 2021, a total of 12 responses were received which were considered in detail. A Feedback Statement was published on 8 June 2021 setting out the Central Bank’s position on the matter which reflects the consensus view from Industry. The new methodology is applied in the context of 2020 levies. View the Feedback Statement here.
Each payment and e-money institution that has been authorised by the Central Bank shall be liable to pay a levy combining a flat rate and variable element calculated as set out in Table 1 below:
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Table 1
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Minimum Levy plus Variable Levy
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Payment & E-Money Institutions
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Minimum Levy
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Variable Levy
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N
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Payment Institutions
E-Money Institutions
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€5,000
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Variable Levy (V) is calculated as follows:
A = B/ C
Where:
A = Variable Levy Rate % (i.e. firm’s % share of Total Value of Transactions processed by all firms )
B = Value of Transactions processed by the firm as reported in On-Line Returns to the Bank for year ended 31 December 2020
C = Total Value of Transactions processed by all firms as reported in On-Line Returns to the Bank for year ended 31 December 2020
An Explanatory Memorandum will be included with invoices to all firms to provide guidance on how the invoice total has been calculated.
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In addition to the Minimum and Variable levies as above, any firms with a risk rating of ‘Ultra High’ from an Anti-Money Laundering / Combating the Financing of Terrorism perspective will be required to pay the €5,000 Minimum Levy above and a separate flat fee of €375,000
Click here to read more on the annual levying process.