Cash Back Law

LEGISLATIVE INITIATIVE / LAW IMPLEMENTATION

MACRO-ECONOMIC CONTEXT

  • During 2002-2003 Romania was facing a major financial clout which determined the Government and the National Bank of Romania to adopt a joint action program, which included a package of legislative measures given with the purpose of stimulating electronic payments.

INITIAL FORM

  • As a result, we had the Emergency Ordinance of Government No. 193 / 2002 on the introduction of modern means of payment to a number of entities such as public utility services providers, public institutions and retailers that had more than 100.000 euro turnover.

2002

  • Romanian Government – adopted the O.U.G no. 193 / 2002 on the introduction of modern means of payment to public utility services providers, public institutions, as well as to traders with more than 100.000 euro annual turnover.

2016

  • Romanian Parliament – adopted law no. 209/2016 (cash back law) on modification of O.U.G. No. 193/2002 on the introduction of modern means of payment – Decreases the turnover threshold for traders required to accept the card payment from 100.000 euro to 10.000 euro. It also introduces the option of advance payment in cash (cash back).

2017

  • Romanian Parliament – draft amendment to law No. 209/2016, the main objective of the amendment being the raise of turnover threshold for traders who are required to accept card payments from 10.000 euro to 50.000 euro.

IN RELATIONS TO MEMBERS, PROJECT PARTNERS AND AUTHORITIES:

  • to enhance industry’s point of view regarding the provisions of the law and the implementing rules thereof, in order to be presented to the authorities responsible for implementation;
  • to inform Association members about the development of the legislative process and implementation schedule.
  • to provide a high level of information among members regarding the provisions of the law
  • to assist its members in the implementation of the law
  • to watch the market evolution in the implementation process and to provide its observations to the members
  • to protect the interests of the Association members in the case unsubstantiated provisions occur in the legislative process.
  • to support the authorities responsible with the implementation of the law with all the information necessary to properly understanding the realities of the industry.
WORKING GROUP FOR CASH BACK LAW
  • Banca Comerciala Română
  • Piraeus Bank
  • Bancpost
  • Banca Transilvania
  • BRD Societe Generale
  • Alpha Bank
  • ING Bank
  • Patria Bank
  • Printec Group
  • Mastercard
  • Visa
  • Wirecard Romania
  • Garanti Bank
  • Raiffeisen Bank
  • OTP Bank
  • Banca Romanească
  • Libra Bank
  • SIA Europe
  • Credit Europe Bank
  • CEC Bank
  • Danubius Exim
PROJECT LEADER AND PROJECT MANAGEMENT

Insights Enterprise

The company was empowered by A.P.E.R.O. to lead the project management, by providing the coordination of all other partners in order to achieve the project objectives.

Cash Back Law

FEATURES AND IMPACT

2002 – 2015

  • Law 209 / 2016 represents a natural continuation of  O.U.G. 193 din 2002  regarding the introduction of modern payment means, normative document that introduced for the first time the mandatory requirement on providers of public utility services, public institutions and traders with a turnover of more than 100.000 euro to accept card payments.
  • Originally designed as a measure to relieve the financial blockage occurred in the 2000s in the economic climate, the development of electronic payments infrastructure proved its efficiency both in terms of reducing grey economy and increasing the traceability of money supply.

DECREASING SOME SYSTEMIC IMBALANCES

  • The measures implemented in the early 2000s by the Government and NATIONAL BANK of ROMANIA helped Romania to exceed the financial clout at that time. The economic climate during the 2002-2015 has been characterized by electronic payments infrastructure expansion and also by dissemination on the market of over 10 million cards. However, the in-depth study of this climate has shown the deepening of imbalances between urban area and rural area in terms of population access to modern financial instruments and means. The Law 209 / 2016 was given with the purpose of reconnecting the rural area to urban areas in terms of electronic payments access by extending the POS terminals network and so facilitating for card holders leaving in rural areas the possibility to use payment modern instruments. (explanatory memorandum).

THE CRITERION OF TURNOVER

  • 100,000 euro turnover threshold for traders who are required to accept card payments, set by O.U.G. 193/2002, was dropped down to 10,000 euro by law 209/2016. In the meantime traders are required to accept payment by bankcard in all locations in which they receive cash.

CASH ADVANCE AT POS (CASH BACK)

  • Advance payment in cash from traders’ POS-terminal has been introduced, the traders earning the right to apply a maximum of 1% commission from the transaction value.

TRADERS PERSPECTIVE

  • By law, for 70,000 traders, public institutions and public utility service providers to operate POS terminals and  to accept card payments is mandatory.

INDUSTRY PERSPECTIVE

  • According to the legal provisions and statistics at the industry level, the network of terminals should grow by around 90.000 units covering a good portion of the countryside. By the time the law entered in force, the electronic payments infrastructure in Romania was counting 160.630 terminals operated by 17 banks.

ISSUING METHODOLOGICAL NORMS

  • The Parliament established that the responsibility of drawing up detailed application procedures belongs to the Ministry of Finance, the latter being in charge to organize consultations with the National Bank of Romania and the business environment previously any decision making and up to January 31, 2017.

BUILDING INFRASTRUCTURE

  • The banks that accept cards are required to provide their own necessary infrastructure and equipment, no later than 90 days from the date this law enters into force, i.e. until 31 March 2017.

POS Terminals network evolution

F.A.Q.