Law No 20,950, which authorizes the issuance of prepaid cards by non-banking entities, granted the Chilean Central Bank (the "Central Bank") the authority to issue certain necessary regulations for its implementation.
Nevertheless and beyond the specific task, the Central Bank has decided to perform a comprehensive and systemic review of the so called "retail" payment methods in Chile, through the issuance of an entire new regulation, which comprehends the issuance and operation of the different kind of cards that currently exist, and which has been published in the Official Gazette on June 30, 2017 (the "New Cards Regulation").
- Reorganization and systematization of the existing regulatory framework
Until now, the card issuance and operation rules were contained in Chapters III.J.1, III.J.2 and III.J.3 of the Financial Regulations Compendium issued by the Central Bank (the "Compendium"), regarding credit, debit and banking-issued prepaid cards, respectively.
In enacting the New Cards Regulation, the Central Bank has concluded that certain regulatory asymmetries and common elements in all of the existing cards made necessary a new systematization of the existing regulations, and has decided to address the issuance of "Payment Cards" (understanding as such, altogether, the credit, debit and prepaid cards) in a new chapter III.J.1, but ruling the particular aspects of the different payment methods in three new sub-chapters ruling credit cards (III.J.1.1), debit cards (III.J.1.2) and banking and non-banking prepaid cards (III.J.1.3), and establishing the Payment Cards operation rules in a new chapter III.J.2, of the abovementioned Compendium.
- New regulation applicable to the issuance of prepaid cards by non-banking entities
In accordance with Law No 20,950, the non-banking issuers of pre-funded payment cards ("Prepaid Cards") shall be special purpose corporations organized in Chile under the terms of Law No 18,046, and their exclusive purpose must be the issuance or operation of Prepaid Cards. The Central Bank, in the new sub-chapter III.J.1.3 of its Compendium, has established the new specific requirements that will be applicable to such issuers, among which it is possible to highlight the following:
The obligation to register in the new Cards Issuers Registry, in accordance with the new regulation that for such purposes the Superintendence of Banks and Financial Institutions ("SBIF") shall issue. The obligation to keep at all times,...