Central Bank of Armenia proposes new payment services law with open banking from July 2027

The Central Bank of Armenia has drafted a new Law on Payment Services to replace the 2004 Law on Payment and Settlement Systems and Payment and Settlement Organizations. Under the draft published on e-draft.am, the law would take effect on July 1, 2027, with public consultation open until October 26.

The draft introduces open banking, allows payment organizations to open payment accounts and sets out customer rights in detail. The package also repeals the 1996 Law on Funds Transfers by Payment Order and replaces the term “payment and settlement” with “payment” in the Tax Code, the Criminal Code and other laws.

According to the explanatory note, drafting the new law is a structural benchmark under the Memorandum of Economic and Financial Policies (MEFP) between Armenia and the International Monetary Fund. Several provisions are based on the EU Payment Services Directive (PSD2).

Open banking

Payment initiation and account information services are added to the list of payment services. With the customer’s consent, their providers will gain access to the customer’s account. The bank or payment organization servicing the account must execute orders received through them within the same time and at the same fees as orders placed by the customer directly. A justified fee may be charged for access, and the Central Bank Board will set common standards for application programming interfaces. According to the explanatory note, such services are not yet widespread in Armenia.

Payment organizations

Payment organizations will be able to provide all payment services set out in the law, including opening and maintaining payment accounts, if they meet the capital and other requirements for each service. The explanatory note says they currently serve customers mainly through accounts opened at banks.

Under the current law, all payment organizations face the same total capital requirement of 100 million drams (about $276,000). The draft does not fix a minimum in the law; the Central Bank Board will set it by type of service.

Payment organizations will be registered by the Central Bank instead of the state register of legal entities. Acquiring 10% or more of share capital, or crossing the 20% and 50% thresholds, will require prior consent from the Central Bank Board, which will decide within 30 working days. Existing licence holders must be relicensed within 6 months of the law taking effect, or their licences will lapse.

Payment systems

Organizations that do not provide payment services will also be able to operate an Armenian payment system. Operators must set non-discriminatory and transparent participation rules for all payment service providers. The requirement to work with foreign money transfer systems only through an Armenian payment system is removed.

Customer rights

A payment service provider must refund an unauthorized transaction no later than the end of the operating day after it is notified. If there are reasonable grounds to suspect fraud by the payer, the deadline is 10 working days. Customers can report an unauthorized or incorrect transaction within 13 months of the debit. The burden of proof lies with the provider, and if it did not require authentication (such as two-factor authentication), the payer is not liable for losses.

Before a transfer, a bank or payment organization must, at the customer’s request, check free of charge whether the payee’s name matches the account number, using data from the Central Bank’s centralized register of bank and payment accounts. For payee-initiated transactions such as direct debits, the payer can claim a refund within 2 months.

If a court, arbitration or the Financial System Mediator confirms that a payment organization breached conduct rules, it must pay an individual customer 300,000 drams, unless it had already remedied the breach and compensated the loss. Customer information obtained in providing payment services is treated as bank secrecy.

State duty

The wording of the Law on State Duty also changes. The annual duty of 1,000 times the base duty (1 million drams), now charged for carrying out money transfers, will be charged for the activity of a payment organization. A duty of the same amount, now paid for processing and clearing of payment instruments and settlement documents, will apply to operators of Armenian payment systems. The annual duty for each branch of a payment organization is 50 times the base duty (50,000 drams). The amount stays the same, but every payment organization will pay it regardless of the services it provides, including open banking providers.

According to the explanatory note, adopting the draft will not significantly change state budget revenue or spending.