January 29, 2020

Electronic Payment Systems of Uzbekistan

1.      Basic regulatory acts:

1.1.    The laws

  • Law on Central Bank of the Republic of Uzbekistan of 12.21.1995, No.ZRU-154-I;
  • Law on Payments and Payment Systems of 01.11.2019, No.ZRU-578;
  • Law on Banks and Banking Activities of 05.11.2019, No. ZRU-580;
  • Law on electronic commerce of 22.05.2015, No.ZRU-385;
  • Law on Electronic Payments of 12.16.2005, No.ZRU-13;
  • Law on Electronic Document Management of 29.04.2004, No.611 II;
  • Law on Electronic Digital Signature of 12.11.2003, No.562-II;
  • Law on Bank Secrecy of 08.30.2003, No.530-II;
  • Law on the Protection of Information in an Automated Banking System of 04.04.2006, No.ZRU-30;
  • Law on Currency Regulation of 07.05.1993, No.841-XII.

1.2.    Regulations:

  • Decree of the President of the Republic of Uzbekistan “On Measures for the Development of the National Payment System” dated 09.19.2018 No.PP-3945;
  • Decree of the President of the Republic of Uzbekistan “On Additional Measures to Increase the Availability of Banking Services” dated 03.23.2018, No.PP-3620;
  • Decree of the President of the Republic of Uzbekistan “On Measures to Accelerate the Development of Electronic Commerce” dated 05.14.2018 No.PP-3724;
  • The Regulation “On Non-cash Payments in the Republic of Uzbekistan” approved by the Resolution of the Board of the Central Bank dated 04.26.2013, No.9/1;
  • Decree of the President of the Republic of Uzbekistan “On Measures to Strengthen Payment Discipline and the System of Mutual Settlements” dated 01.24.1996 No. UP-1363;
  • Rules for the Organization of Payment Systems Using Public Telecommunication Networks, approved by the Decree of the Central Bank, registered by the Ministry of Justice on 02.13.2008 No.1767;
  • Instruction on the Inclusion of a Commercial Bank in an Electronic Payment System (approved by the Central Bank on 05.10.1997 No. 331).

2.      Operations of Electronic Payment Systems

The operation of electronic payment systems (hereinafter – EPS) in the Republic of Uzbekistan has been going on for several years. Such payment systems, in particular are Payme (JV Inspired LLC), Click (Click LLC), Upay (Maroqand LLC) and Humo.

Article 3 of the Law No.ZRU-13 defines electronic payment as the implementation of non-cash payments through the electronic payment documents with technical facilities, information technology and information systems services.

3.      The types of EPS Operations

Through EPS, a number of operations are performed, among which it is necessary to highlight:

  • acceptance of cash from individuals for transfer to an entity providing services;
  • operations using bank cards, including receiving cash through ATMs, as well as using payment cards of issuers, which are not credit organizations.

A payment system is a set of relations that ensure payments are made through the interaction of a payment system operator, payment system participants or payment organizations through the application of procedures, infrastructure and payment system rules established by the payment system operator.

Participants in the payment system are banks that make settlements and conclude an agreement with the payment system operator on participation in the payment system.

4.      Subjective composition of EPS

In accordance with Law No.ZRU-13, the subjects of the payment system are members of the payment system and users of the payment system. Members of the payment system are legal entities that provide electronic payment services to users of the payment system. The users of the payment system are legal entities or individuals who are provided with electronic payment services.

Accordingly, from the point of view of legal regulation, the EPS is a combination of:

  1. entities that undertake payments;
  2. recipients of payments – organizations that sell goods (services); and also
  3. consumers who must be registered in EPS using virtual monetary units.

The relations between the subjects of the payment system are regulated by law and have contractual character. The contract must be concluded in writing and contain the following provisions:

  • the procedure for sending and receiving electronic payment documents;
  • the procedure for confirming the authenticity of electronic digital signatures;
  • amount of payment for electronic payments;
  • the rights and obligations of the parties;
  • the responsibility of the parties;
  • dispute resolution mechanism;
  • other provisions in accordance with the legislation.

5.      Types of payment systems and services

Law No.ZRU-578 divides payment systems on significant payment systems and other payment systems.

The Central Bank classifies the payment system as a significant payment system if its uninterrupted operation contributes to the stable functioning of the payment services market of the Republic of Uzbekistan, and interruptions (failures) in its operation may lead to risks in the payment services market.

A payment system is significant if it occupies a share of the payment services market in excess of the value established by the Central Bank, or if payments are made during the year in the amount of not less than the indicators established by the Central Bank.

Payment services include services for:

  • receiving and making payments using a bank account;
  • accepting cash funds for crediting to bank accounts, including third parties;
  • accepting cash funds for making a payment without opening a bank account by the payer;
  • issue and redemption of electronic money;
  • issue of bank cards;
  • sales of electronic money and bank cards;
  • receiving and processing payments made using electronic money;
  • processing payments in electronic form and transmitting the necessary information to the bank for making a payment or accepting funds for these payments;
  • receiving and making money transfers through money transfer systems.

Payment services do not include services for:

  • transfer of cash by the person making the payment to the person to whom the payer has obligations carried out without the participation of the payment service provider;
  • collection of banknotes, coins and valuables;
  • the implementation of exchange operations with cash foreign currency without opening a bank account;
  • ensuring information and communication and technological interaction between the beneficiary and a payment service provider when the latter makes money transfers in favor of the beneficiary on accepted payments without the participation of third parties.