What is a Payment Institution?

A Payment Institution is a type of financial entity that has been authorized to provide payment services to individuals and businesses. Unlike banks, Payment Institutions typically do not offer deposit-taking services, but they play a crucial role in facilitating transactions, streamlining payments, and providing innovative financial solutions. Below is an explanation and exploration of the concept.

Definition and Core Functions

Providing Payment Services

A Payment Institution is primarily engaged in offering payment services, which can include a variety of activities such as executing payment transactions, issuing and managing means of payment, remittance services, and payment initiation services.

Non-Bank Financial Entity

Payment Institutions are distinct from traditional banks. While they are part of the broader financial ecosystem, they do not take deposits or offer loans in the same manner as banks.