萬國法律事務所

On 15 January 2015, Taiwan's Legislative Yuan passed the “Electronic Payment Processing Institutions Act” (“Act”), thus providing a fundamental legal basis for electronic payments provided by third parties via the Internet, which ability is essential for successful e-commerce transactions.

The Act allows licensed Electronic Payment Institutions (“Electronic Payment Providers”) to engage in the business of third-party collections and payments, deposits of payments for value stored, and remittances of funds between electronic payments accounts (collectively, “Third-Party Payment Businesses”). The caps for both value stored by one user and for each remittance of funds between electronic payments accounts is NT$ 50,000 or its equivalent amount in a foreign currency.

The Electronic Payment Providers must set aside funds received from users in trust in the specified deposit account, or obtain a full bank guarantee. The Electronic Payment Providers are also required to contribute to the liquidity/repayment fund in a given ratio of its operating income as prescribed for by the Financial Supervisory Commission (“FSC”).

The minimum paid-in capital for an Electronic Payment Provider is NT$ 500,000,000. However, if an Electronic Payment Provider will only engage in the business of third-party collections and payments, the minimum paid-in capital is reduced to NT$ 100,000,000. Banks in Taiwan, Chunghwa Post Co., Ltd., and issuers of Electronic Stored Value Cards under the Act Governing Issuance of Electronic Stored Value Cards may also apply with the FSC for approval to operate the Third-Party Payment Businesses.

An Electronic Payment Provider is permitted by the Act to engage in the business of Electronic Stored Value Cards, subject to the approval required under the Act Governing Issuance of Electronic Stored Value Cards. Foreign companies that operate in any of the Third-Party Payment Businesses in Taiwan without first establishing an Electronic Payment Institution and obtaining approval, and persons who cooperate or assist with said foreign companies to engage in the Third-Party Payment Businesses in Taiwan, will be subject to imprisonment, criminal detention and/or fines.

The Act is expected to take effect and be implemented in the first or second quarter of 2015.