Kazakhstan: Regulation Of Payment Systems And Market Of Payment Services

Last Updated: 15 December 2016
Article by Abylkhair Nakipov and Perizat Nurlankyzy

According to the National Bank of the Republic of Kazakhstan, two national payment systems currently operate in the Republic of Kazakhstan (RK): Interbank Money Transfer System and Interbank Clearing System, other than local systems such as Altyn Card of National Bank of Kazakhstan JSC and local card of Citibank Kazakhstan JSC. Besides, payment cards of international payment systems such as Visa International, MasterCard Worldwide, American Express International and UnionPay International are issued in the RK. Visa and MasterCard payment systems account for more than 95% of all performed transactions and issued debit and credit cards. In any case, performance of payment or money transfer via any payment system, both local and interbank, is conducted via a bank. However, IT developments brought about various means of payment, represented by numerous payment system operators and this required legislative regulation. The former Law of the RK, "On Payments and Transfers", did not fully regulate interrelations of all subjects of the payment services market. Therefore, on 26 July 2016, the President of the RK signed the Law of the RK, "On Payments and Payment Systems", (the Law) which came into force on 10 September 2016.


The Law was adopted to effectively regulate public relations arising in the sphere of payment systems operation, regulate the payment services market, as well as improve the practice for performance of payment and money transfer in the RK.

The new regulatory act puts completely new participants into the payment services market, namely, non-bank suppliers of payment services like payment organizations, payment agents and subagents.

What is the payment system?

Upon conclusion of agreement of participation in a payment system with a payment system operator, payment organizations, payment agents and subagents become participants of said system, which is defined by the Law as an aggregate of relations, securing payments and/or money transfer by cooperation of payment system operators and actual payment system participants, by applying procedures, infrastructure and rules, established by payment system operators.

It's common knowledge that any system must be governed. As you can see, a payment system is operated by an operator, a legal entity carrying out activities to secure payment system operations while performing operational and technological functions. For example, Visa Inc. corporation governs the payment system, Visa International and the National Bank of Kazakhstan governs the local payment systems, Altyn Card and Bonus club HALYK.

The Law determines three types of payment systems

1. Systemically important payment system

2. Important payment system

3. Other payment system

In accordance with the Law, the National Bank of the RK maintains the register of payment systems.

The procedures followed by an organization and the functioning of its payment system is determined by the rules stipulated by the operator.

The rules of the payment system and the rates (service costs) of payment system operators must be mandatory published on operator websites and must be applied by the operator and system participants not sooner than the date of publication thereof.

What are the payment organizations?

The Law introduced the payment organization concept. In cases where a payment organization implies participant of a payment system, the organization is a commercial legal entity, entitled to provide payment services to clients following its accounting registration in the National Bank of the RK.

Subject to registration number of accounting registration, a payment organization is authorized to provide the following payment services:

  • Cash acceptance for performance of payment without transmitter opening a bank account
  • Implementation (distribution) of e-money and payment cards
  • Acceptance and processing of payments with e-money
  • Processing of payments initiated by client in e-form and transfer of necessary information to banks or organizations carrying out certain types of banking operations, for performance of payment and/or transfer or acceptance of money for such payments.

Payment agents and payment subagents?

With regard to payment agents and subagents, the Law defines an agent as a legal entity who concluded agent agreement for provision of payment services, with a bank, an organization carrying out certain types of banking operations or a payment organization. A subagent is defined as a legal entity or a sole entrepreneur who has concluded agent agreement for provision of payment services directly with a payment agent.

Based on the agent agreement, agents or subagents can render the following payment services:

  • Cash acceptance for placing to bank accounts, including those of third parties
  • Cash acceptance for performance of payment without transmitter opening a bank account
  • Implementation (distribution) of e-money and payment cards

It should be noted that payment agents providing payment services on behalf of and at the expense of, say payment organizations, are not required to undergo accounting registration in the National Bank of the RK. In cases where agents represent banks or organizations carrying out certain types of banking operations, the Law does not oblige them to obtain licenses as the latter need to. Banks, organizations providing certain types of banking services and payment organizations must independently maintain registers with details of their payment agents and subagents.

Regulator and supervision

The body governing and supervising the payment services market and payment systems is the National Bank of the RK. For these purposes it:

  • Adopts regulatory acts aimed at securing efficiency of payment systems functioning
  • Maintains registers of payment service suppliers
  • Maintains registers of payment systems
  • Probes statistics of payments and money transfers
  • Monitors, analyses and assesses functioning of payment systems
  • Audits operators' activities for compliance with the laws of the RK, etc.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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