Financial Crime World

Moldovan Fintech Sector Makes Strides Amid Regulatory Changes

Chisinau, Moldova - A Hub for Financial Innovation

The Republic of Moldova’s fintech sector has been making significant progress in recent years, driven by technological advancements, cross-border market integration, and the country’s need to align its regulatory framework with EU regulations.

Key Drivers of Growth

  • Technological Advancements: Moldova is leveraging cutting-edge technology to drive innovation in the financial sector.
  • Cross-Border Market Integration: The country is integrating with global markets, making it easier for businesses and customers to access financial services across borders.
  • Regulatory Alignment: Moldova is aligning its regulatory framework with EU regulations, ensuring a level playing field for fintech companies.

Implementing PSD2: A Game-Changer for Payment Service Providers

The Payment Services Directive 2 (PSD2) is introducing open banking standards that will impact payment service providers, businesses, and customers. According to Nicolina Turcan, Head of Fintech and E-Payments at ACI Partners, Moldova is likely to implement the Berlin Group standard for open banking.

Benefits of Open Banking

  • Cross-Border Compatibility: A uniform API will ensure seamless communication between payment service providers.
  • Improved Customer Experience: Businesses and customers will have easier access to financial services across borders.

Modernizing Financial Infrastructure: Instant Payments and SEPA Integration

Moldova is working on implementing instant payments infrastructure as part of its broader strategy to modernize its financial sector. The country’s regulator is also aligning Moldova’s payment services with the Single Euro Payments Area (SEPA) Regulation, which will facilitate cross-border transactions.

Challenges Ahead

  • Operational Challenges: Payment service providers must implement robust authentication measures and comply with stringent Anti-Money Laundering/Know Your Customer (AML/KYC) regulations.
  • Data Protection Concerns: The implementation of the General Data Protection Regulation (GDPR) requires secure management of data and controlled access to third-party providers.

Recent Developments and Future Outlook

Despite these challenges, Moldova’s fintech sector has made significant strides. Recent developments include:

  • Submission of a request to join SEPA in early 2024
  • Launch of the national instant payment system - MIA
  • Approval of legislation regulating crowdfunding and crowd investment

Looking ahead, Turcan believes that Moldova will continue to improve its business development by integrating more sectors, such as the energy market. The goal is to establish Moldova as a trustworthy market, balancing legal requirements and rigorous standards with business growth.