In humanity ́s never-ending quest for improvement, technology plays a significant role as to the development of tools, production of devices and equipment, the upgrading of techniques, skills and processes which, in general, lead to the accomplishment of higher and higher goals that impact or influence our lives in different ways.

Technology, in a way runs faster than law. In many cases, it is only when risks or an actual harm are detected, that law takes an interest in regulating certain areas involving or related to technolo- gy, as it happens with hazardous products, devices or materials which have a strict compliance framework as to the diminish- ment of risks and mitigation of damages.

There are certain businesses which very nature of depend on the use of state-of the-art technology, and depending on the type of products or services offered to the public, as well as their inher- ent risks, if any, governments may produce special legal frame- works regulating such business areas, guaranteeing both the doing business in the country as well as the safety, security and protection of consumers. So is the case of electronic money in Nicaragua.

In the year 2012, the Board of Directors of the Superintendent ́s Office for Banks and Other Financial Institutions (“SIBOIF”), passed Resolution CD-SIBOIF-725-2-ABR26-2012 “Regulations for the Authorization and Functioning of Electronic Money Oper- ating Entities” (“Regulations”, as amended from time to time), which classified as “non-banking financial institutions” those entities providing financial services facilitating payment and collection services by means of mobile devices (e.g., cell phones, point of sales terminals, etc.) with resources from their users in the form of electronic money and, thus, subject to the supervision of SIBOIF, which is the governmental regulator for these entities.

The Regulations set forth the requirements and procedures that should be met and cleared in order to become an authorized, by SIBOIF, and fully operative Electronic Money Operating Entity (“EME”). Also, certain concepts and legal-commercial structures are adopted, making the busi- ness very specialized and regulated.

The Regulations define “Electronic Money” as the annotation in an account or an accounting record of a credit ́s monetary value demandable to its issuer, with the following characteristics: (a) it is stored in a mobile device; (b) it is accepted as a payment facilitator means by individuals or entities within the issuer ́s Mobile Transactions Circuit; (c) it is issued for an equal value of the required funds; (d) it may be cashed at any moment; (e) it is not a deposit; (f) it does not generate interests; and (g) it is registered as issuer ́s liability.

In order to operate with Electronic Money a structure should be constructed first. Such structure is known as the Mobile Transactions Circuit (“MTC”), which is comprised of the instruments, mechanisms, procedures and norms for the storage and transfer of Electronic Money, in real time, by means of mobile devices and solely and exclusively within the agencies network, trans- action centers and users of one and the same EME.

Hence, within an EME ́s MTC you may identify: (i) the Internal Regulations governing its own procedures and structure; (ii) a Network of Agencies consisting of commercial establishments in the country, authorized by EME to acquire and to distribute Electronic Money or to convert it into monetary species within the same EME ́s MTC; (iii) Transaction Centers, such as public services suppliers, stores and commercial establishments in general, authorized by EME to provide access to the mobile payment solutions service within the EME ́s MTC; and (iv) Users, which are the individuals or legal entities using an EME ́s services. An EME must have transactional records of Users, which allow Users to conduct transactions with Electronic Money by means of mobile devices within the same EME ́s MTC. Such transactional record is known as “mobile wallet”.

EMEs are subject to a number of operative rules aimed to protect users ́ resources, provide transparency in transactions and to avoid illicit activities such as money laundering and the financing of terrorism. Amongst such rules, there are those establishing that EMEs should have separate accounts, segregating their own resources from those received from their agencies due to Electronic Money purchases; EMEs must comply with capital stock and patrimony require- ments, and must provide clients with clear and truthful information about their products, services and costs, while also counting with an office for customer service. Clients cannot be obliged to have minimum funds of Electronic Money, and there are no statutes of limitations or prescription period for the funds stored, so EMEs cannot appropriate unused funds and must return them to users at any time per users ́ request.

The Nicaraguan legislative production, therefore, has taken an important step to take advantage of the technological development, allowing the improvement in the collection-payment dynamics, enabling faster solutions and establishing safety measures for the parties involved; which alto- gether generates more business opportunities as well as the necessary confidence to implement a new methodology for the collection and payment processes, based on the means offered by technology and within the framework provided by law.