Banks in Honduras Face New Regulatory Requirements Amid Growing Fintech Sector

Introduction

The financial technology industry has experienced rapid growth in recent years, transforming the way businesses operate in Honduras. The fintech ecosystem has brought about benefits, opportunities, and increased efficiency in service delivery, leading to heightened competition and reduced costs.

The Challenges of Regulatory Compliance

However, this new technology also poses risks from a regulatory standpoint. To mitigate these risks, the Honduran government has implemented new laws aimed at protecting financial consumers.

Key Regulations

• 2016 Authorization and Operation of Non-Banking Institutions that Provide Payment Services Using Electronic Money Rule: This regulation was implemented to address the growing fintech sector.
• Legislative Decree No. 83-2021: Passed in 2021, this decree aims to regulate domestic and foreign entities providing payment and transfer services in Honduras.

New Regulations for Compliance

To comply with Legislative Decree No. 83-2021, the Central Bank of Honduras issued two new regulations:

Payment and Transfer Services Using Electronic Money Regulation

• Organization: Requirements for legal entities operating within Honduras that provide electronic payment and transfer services.
• Operation: Rules on organization, operation, and functioning to ensure compliance with financial inclusion and stability policies.

Electronic Payment Service Providers Regulation

• Activities: Governs the activities of domestic and foreign entities offering electronic payment services through technological platforms in Honduras.
• Registry: Establishes a registry for these providers, aiming to enhance user protection and facilitate access to financial services.

Conclusion

The implementation of these regulations reflects the Honduran government’s commitment to addressing the growing fintech sector while prioritizing consumer protection and financial stability.