Category Archives: Bulletin

Resolution No. JPRM-2024-018-M (“Resolution”), issued on September 4, 2024, by the Monetary Policy and Regulation Board (“JPRM”), enacted the “Regulation governing payment methods, systems and fintech activities in Ecuador.”

The Resolution, which replaces Resolution No. JPRM-2023-014-M (“Repealed Resolution””) introduces necessary reforms to ensure the application of the Law for the Development, Regulation, and Control of Technological Financial Services – Fintech Law.

The Resolution generally maintains the content of the Repealed Resolution; however, it introduces the following reforms:

1. It modifies the concept of electronic wallets, establishing that these are payment methods that, through a technological application or online service on an electronic device, allow users to make payments, collections, and transfers and send and receive financial remittances in real-time.
2. It defines the processing of electronic payment methods as the service provided by auxiliary service entities to banks, credit unions, and mutual savings and loan associations to process payment methods that allow their clients or members to make payments, collections, and transfers.
3. It establishes that auxiliary financial service entities specifically authorized to provide electronic payment methods may operate electronic wallets.
4. It establishes that fintech entities providing digital credits may also participate in the Auxiliary Payment Systems. Thus, the following are recognized as participants of the Auxiliary Payment Systems (“Participants”): financial entities, auxiliary service entities of the financial system (transactional, payment, network, and ATM services, and card administrators), fintech entities (neobanks and digital credit providers), specialized electronic deposit and payment companies (“SEDPES”), and Auxiliary Payment System Administrators (“ASAP”).
5. It establishes that Clients shall be considered those natural or legal persons who enter a contractual relationship to use services offered by a Participant, whereas Users shall be those who utilize the services without having a contractual relationship with the Participant.
6. It introduces the obligation for the Central Bank of Ecuador (“BCE”) to keep the registry of Participants updated and published, which will include details of the services each Participant provides.
7. It establishes that Participants must allow Users to customize their maximum transaction amounts and implement due diligence controls and policies related to the frequency of daily payments they can execute.
8. It introduces the obligation for Participants to inform Users about existing security measures and the available channels for resolving claims related to such events. Participants must ensure the privacy and security of the information provided by Users.
9. The services that Participants may provide have been reformed and are now categorized according to the following: payment aggregation, payment gateway, electronic payment processing, transactional switch for payment services, money remittances, collection of public resources, and clearing.
10. The Central Bank of Ecuador (BCE) must respond to Participants’ requests for operational authorization within 30 days. Furthermore, the process for terminating the administrative act by which the operational authorization is granted is established.
11. The services that SEDPES may offer are expanded to include sending remittances and services established for Participants, which they can provide exclusively to their clients.
12. The Superintendence of Banks is no longer required to issue a license or authorization for SEDPES activities.

General provisions of the Resolution establish the following:

1. The reserve requirements for SEDPES must be met within three months of the operational authorization’s issuance.
2. The BCE will notify the Office of the Attorney General of individuals or entities engaging in activities regulated by the Resolution without the corresponding authorization.
3. All individuals or legal entities with a Tax Identification Number must offer their customers at least one electronic payment channel.
4. The operational authorizations issued by the BCE to SEDPES or ASAP will be notified to the Superintendence of Banks and the Superintendence of Popular and Solidarity Economy for their knowledge.
5. In-person transactions with credit, debit, prepaid cards, or electronic wallets must be conducted in the customer’s presence. To this end, establishments must ensure that the point-of-sale (POS) device is in a position that allows the customer to observe the insertion, swipe, or tap of the card.
6. A license from the Superintendence of Banks will only be required in cases determined by the JPRM.

Within two months, the BCE will have to adjust existing regulations to incorporate provisions of the Resolution.

Within six months, the BCE will review the services provided by qualified Participants and classify them by the provisions of the Resolution.

On March 11, 2024, The Constitutional Court issued the ruling 878-20-JP/24, which analyzes the Maternity Leave in case of death of children, from which we highlight:

• The Court analyzes the scope of maternity leave, with the premise that pregnant women have the right to prioritized protection and care of their integral health during pregnancy, childbirth and postpartum.
• The postpartum or puerperium is the stage in which the body progressively recovers from the physical and psychological changes that have occurred, to return to its pre-pregnancy condition. This varies for each person.
• The Court concludes that it is not appropriate to suspend maternity leave due to the death of the newborn child, based on the argument that the reason for the leave has disappeared ignoring the need for the woman’s recovery.
• It argues that suspending maternity leave on the assumption that its sole purpose is to care for the children, would perpetuate the gender stereotype that assigns to women the role of primary caregiver in the family nucleus. And resolves that every working woman has the right to the full enjoyment of her maternity leave, despite the death of her child.

Through Executive Decree 333 of July 12, 2024, published in the Third Supplement of the Official Registry 600 on July 15, 2024, the Public Procurement Law Regulations (the “Regulations“) were amended.

The key amendments are summarized below:

1. The contracting of Ecuador’s tourism promotion is included as a special regime. Under this regime, the following may be contracted: (i) supply and demand studies; (ii) advertising; (iii) organization, logistics, and assistance for events and fairs; (iv) creation of tourism promotion campaigns; and (v) promotion and positioning of the country brand (Marca País).
2. A legal entity with its main office in the canton, province, or region where the contract will be executed is considered a local supplier.
3. If the contractor is an obligated subject before the Financial and Economic Analysis Unit (UAFE), it must hold a Certificate of Compliance from the UAFE during the contractual execution phase.
4. The study of technological disaggregation in works applies only when the reference budget is equal to or exceeds the amount resulting from multiplying the coefficient 0.00003 by the State’s initial budget for the corresponding fiscal year. For 2024, such amount is US$998,904.59.
5. Public entities may acquire domestic and international airline tickets under any of the following mechanisms:
6. Direct purchase from airlines.
7. Direct purchase from airlines using business or corporate plans.
8. Direct purchase through online ticket platforms.

Through travel agencies, if deemed appropriate for technical and operational reasons.