Financial Crime World

Honduras Strengthens Online Payment Security Measures

The Honduran government has implemented significant regulations to enhance the security and transparency of online payment systems within the country. The National Banking and Insurance Commission (CNBS) has established a clear framework for overseeing Non-Banking Electronic Money Institutions (INDELs) and Electronic Payment Service Provider Entities (EPSPEs), ensuring that electronic transactions are secure and trustworthy.

Regulatory Framework

In 2016, the CNBS began supervising INDELs with general regulations. Two years later, in 2021, a legislative decree created a regulatory framework to govern the organization, operation, and functioning of both national and foreign entities providing payment and transfer services. This was followed by the introduction of two key regulations:

  • Regulation for Payment and Transfer Services through Electronic Money: This regulation outlines the requirements for INDELs to offer electronic money services within the national territory.
  • Regulation for Services offered by Electronic Payment Service Provider Entities: This regulation governs the activities of EPSPEs, which provide transfer services without engaging in the activity of converting physical to electronic money and vice versa.

Non-Banking Electronic Money Institutions (INDELs)

Authorized by the Central Bank of Honduras (BCH), INDELs offer a range of services, including:

  • Fund transfers and payment operations using electronic money within the national territory
  • Activation of electronic wallets
  • Conversion of physical Lempira from credit cards, deposits in Financial System Institutions, or Credit Unions to electronic money and vice versa
  • Balance inquiry and transaction history
  • Sending and receiving national transactions with electronic money

To establish an INDEL, a corporation (S.A.) must have a minimum capital of one hundred thousand Lempiras (L 100,000.00), which must be related to the average daily balance of electronic money enabled on its platform every six months.

Digital Wallets

The BCH carefully regulates and monitors digital wallets issued by INDELs, ensuring compliance with rigorous controls for user identification and established limits. These limits vary depending on the type of operation, setting maximum amounts per transaction, accumulated in the month, and maximum wallet balances.

Electronic Payment Service Provider Entities (EPSPEs)

EPSPEs are legal entities that offer transfer services without engaging in the activity of converting physical to electronic money and vice versa. They provide services such as:

  • Payment gateways
  • Payments for purchases from affiliated companies
  • Payments for public or private services through collection
  • National transactions initiated with cash or through deposit accounts, digital or mobile electronic wallets, or payment credentials

Regulatory Requirements

Both INDELs and EPSPEs must comply with provisions that ensure the security and traceability of transactions. These measures include:

  • Implementation of authentication mechanisms
  • Identity verification
  • Maintenance of updated records

The implementation and regulation of INDELs and EPSPEs have significantly contributed to the modernization and efficiency of the financial system in Honduras, providing users with more flexible and convenient options while ensuring the safety and transparency of all electronic transactions.