The National Bank of Kyrgyzstan has submitted a draft for public discussion that will require payment terminals to identify customers when topping up bank accounts, cards, and e-wallets with cash. The regulator intends to remove these transactions from the low-risk category to control cash flows.
Identification mechanics
Currently, depositing cash to a card via a terminal does not require identity verification. According to 24.kg, the National Bank proposes requiring payment organizations to establish the payer’s identity before accepting banknotes.
For verification, terminals will have to use one of the available methods: entering personal data, passport scanning, photo and video recording, NFC, biometrics, or Kyrgyzstan’s Unified Identification System. The obtained data will be cross-checked with state digital services.
Before processing the payment, the system must also check the customer against sanctions lists of individuals involved in terrorism, extremism, and money laundering. If there is a match, the terminal will deny the transaction.
Exceptions for everyday payments
The requirement will specifically apply to topping up accounts and wallets. Some transactions will remain on the low-risk list and will be available anonymously. This list includes payments for utilities, internet, and television, loan repayments, taxes, fines, state fees, and ticket purchases.
Market impact
The National Bank explains the initiative as a need to comply with international FATF standards and ensure transfer traceability. If the document is adopted, the new rules will take effect three months after official publication.
For the payment systems market, this means an inevitable increase in infrastructure costs to integrate terminals with state databases and document reading modules. Financial institutions will have to update their software and possibly part of their hardware fleet on a tight schedule.