Dutch regulator consults on sub-merchant good practices
On 12 December 2023, the Dutch regulator (DNB) launched a consultation on its good practices on the provision of payment services to sub-merchants.
What is this about?
On 12 December 2023, the Dutch Central Bank (DNB) launched a consultation on its good practices on sub-merchants. These good practices provide guidance to payment institutions (PIs) and electronic money institutions (EMIs) on how to manage risks related to the provision of payment services to (clients with) sub-merchants. The consultation period ends on 25 January 2024.
Which parties should care?
The good practices are relevant for Dutch PIs and EMIs that provide payment services to (clients with) sub-merchants.
What should they know?
Through market research conducted in 2022, DNB observed the increased use of various structures involving sub-merchants and investigated the control measures applied by the payments sector.
Based on this research, DNB has established good practices. These good practices provide guidance on control measures to be applied by PIs and EMIs when providing payment services to (clients with) sub-merchants. The good practices touch upon, among others:
- the coverage of different risk scenarios related to sub-merchants in PI’s and EMI’s systemic integrity risk analysis (SIRA);
- the adoption of a customer due diligence policy by PIs and EMIs related to (clients with) sub-merchants; and
- the making of adjustments to PI’s and EMI’s transaction monitoring systems to tailor these to situations involving sub-merchants.
When does this become relevant?
After expiry of the consultation period on 25 January 2024, DNB will process the received consultation feedback and decide upon the final version of the good practices. It is currently unclear when such final version will be published.
Any further thoughts?
We are pleased to see that DNB is looking to establish best practices on providing payment services to sub-merchants, which is an area on which to date limited public guidance has been given by DNB. In this context, we note that the appendix to the good practices addresses some of the most common types of sub-merchant structures observed by DNB in practice.
Feel free to reach out in case you are considering to respond to DNB’s consultation and would like to discuss your thoughts with us!
Responses to the consultation can be submitted here.
