A small electronic money institution means a legal person established in the Republic of Croatia, which has been issued a decision by the Croatian National Bank on the entry of a small electronic money institution in the register of payment service providers and electronic money issuers and which may issue electronic money and provide payment services referred to in Article 3, paragraph (2), items (3) to (6) of the Electronic Money Act.

Small electronic money institutions may issue electronic money and provide payment services exclusively in the territory of the Republic of Croatia.

Submission of the application for entry in the register

A legal person established in the Republic of Croatia intending to issue electronic money as a small electronic money institution (hereinafter referred to as 'applicant') submits an application to the Croatian National Bank for entry in the register in accordance with Article 60 of the Electronic Money Act. All required documentation and information prescribed in accordance with Article 60, paragraph (4) of the mentioned Act should be enclosed with the application, indicating the payment services that the applicant intends to provide and those that are not linked to the issuance of electronic money.

The application for entry in the register of payment service providers and electronic money issuers should also be supported by the report on the average outstanding electronic money that may not exceed the amount of EUR 265,000.00. Where the applicant has not commenced operating or has not operated long enough to calculate the average outstanding electronic money, a projection of the average outstanding electronic money for the following six months that may not exceed the amount of EUR 265,000.00 should be enclosed.

If the applicant provides payment services that are not linked to the issuance of electronic money, the total average monthly value of payment transactions executed by the applicant in the last 12 months, including the payment transactions executed through its agents, may not exceed the amount of EUR 995,000.00. Where the applicant has not yet commenced operating or has operated for less than 12 months, a projection of the total amount of payment transactions in the following 12 months should be enclosed, from which it is evident that the average total monthly value of executed payment transactions, including the payment transactions executed through its agents, will not exceed the amount of EUR 995,000.00.

The prescribed documentation and information that have to be submitted to the Croatian National Bank for the purpose of entry in the register of payment service providers and electronic money issuers are specified in the Guidelines on the information to be provided for the authorisation of payment institutions and e-money institutions and for the registration of account information service providers under Article 5, paragraph (5) of Directive (EU) 2015/2366.

Special requirements concerning certain documentation and information, submitted by the applicant pursuant to Article 60, paragraph (4) of the Electronic Money Act, referring to the application of Article 17 of the Act, are governed in more detail in the following regulations:

• where the applicant intends to provide payment services that are not linked to the issuance of electronic money, with regard to the requirement referred to in Article 17, paragraph (3), item (8) of the Electronic Money Act for the submission of a description of the measures intended to be taken for safeguarding payment service user's funds in accordance with Article 35 of the Act, the scope of and the methodology for the calculation of safeguarded funds and the characteristics of the forms of assets or the insurance policy or comparable guarantee as a form of safeguarding are prescribed in more detail in the Decision on safeguarding the payment service users' funds;
• with regard to the requirement referred to in Article 17, paragraph (3), item (10) of the Electronic Money Act, referring to the incidents reporting mechanism, which should take into account the notification obligation laid down in the Act governing payment operations, the classification of major incidents and the content, the format, including standard notification templates, and the procedures for notifying such incidents are prescribed in more detail in the Revised Guidelines on major incident reporting under PSD2;
• with regard to the requirement referred to in Article 17, paragraph (3), item (14) of the Electronic Money Act for the submission of a description of security controls and risk mitigation measures, the EBA Guidelines on ICT and security risk management should be taken into account;
• with regard to the requirement referred to in Article 17, paragraph (3), item (16) of the Electronic Money Act for the submission of a description of the organisational structure, the applicant intending to outsource certain operational activities of the issuance of electronic money or the provision of payment services is required to ensure that the intended outsourcing complies with Article 44 of the Electronic Money Act and the Guidelines on outsourcing arrangements.

In addition to the application and the prescribed documentation, the applicants should also submit a completed and signed Form for the collection and processing of personal data.

Decision of the Croatian National Bank

Based on the submitted application for entry in the register of payment service providers and electronic money issuers and the submitted documentation, the Croatian National Bank decides on the application in an administrative procedure and adopts a decision on entry in the register if all the conditions prescribed by Article 59 of the Electronic Money Act have been met. Legal persons may commence issuing electronic money only after these payment services have been entered as business activities in the register of companies.