VAS: How does Lemonway support VAS up to agent status?

8 June 2021

Business Insight

Since the end of 2019, the VAS industry has had to adapt to new European regulations. The European Banking Authority or EBA now includes Value Added Services in the scope of PSD2, along with marketplaces and alternative finance platforms. To comply with this new regulation, VAS have two options: to become a payment institution themselves by obtaining a license or to become a payment agent backed by a licensed payment institution. This second solution is flexible and secure and allows them to outsource procedures and therefore save time. So, how does Lemonway help VAS to become payment agents? Our answers.


Value-added services: definition and regulatory framework

VAS numbers or Value Added Services numbers are premium rate telephone numbers. The telephone number used by the caller is charged at a higher price than a normal call, for the provision of a specific telecommunication content or service. In practice, the use of such a number involves, at least, 4 distinct actors:


  • The caller, otherwise known as the user of the premium telecommunications service ;
  • The originating operator, otherwise known as the local loop operator (LLO), which markets the telecommunication service to its subscribers;
  • The incoming operator, otherwise known as the VAS operator, approved by ARCEP, which operates said premium-rate numbers;
  • The content publisher or merchant, who provides the content or service for which the caller uses a premium rate number.


VAS: a payment solution in its own right

In addition to offering a telecommunication service, premium-rate numbers participate in the execution of a payment transaction, by collecting funds on behalf of third parties. In principle, this activity can only be carried out by payment service providers approved by the ACPR. In order not to harm premium-rate numbers, the legislation provides for an exemption: the “TELCO” exemption. This simplified system allows operators to provide payment services without having to obtain approval.

However, the activity related to the operation of premium-rate numbers is hybrid: it is controlled both by ARCEP for the telecommunication service rendered to callers and by the ACPR for the provision of payment services. Therefore, the ACPR decided that receiving funds was a payment service in its own right and that the VAS activity should therefore be regulated.

In a press release dated September 6, 2019, the European Banking Authority thus recalls that the TELCO exemption regime applies only to operators with a direct contractual link with the consumer. In other words, only local loop operators and content publishers are exempted and benefit to date from a lighter regime. On the other hand, any other transit, collection, or arrival operator (VAS operator) must now either obtain a payment institution license or obtain the status of payment agent from a duly licensed payment institution. Therefore, the PSD2 applies to VAS, in the same way as to marketplaces or alternative financing platforms.


VAS: comply by becoming a payment agent

To comply with the new regulatory requirements, VAS have two options:

  • Or become a payment institution by taking the necessary steps with the ACPR to obtain a license;
  • Or become a payment agent by relying on a Payment Service Provider, and benefit from its approval.


The simplest and fastest solution is to rely on a payment service provider to obtain payment agent status. Indeed, the application for approval from the ACPR takes time and requires significant compliance work. On the contrary, when they are backed by a PSP, VAS is relieved of all regulatory constraints. As a true intermediary, the role of the PSP is to authorize, organize, verify, regulate and secure financial transactions. Responsible for controlling the origin and destination of funds, it is the PSP that collects the funds before paying them out. For VAS, the PSP represents real support in compliance with regulatory requirements.


Become a payment agent with Lemonway

As an ACPR-approved payment institution, Lemonway assists VAS in obtaining its payment agent status. A true partner, the Lemonway PSP is a solution that allows VAS to comply with regulations.

How does it work?  To optimize the process, Lemonway has created a standardized agent file that it makes available to VAS (agent status application documents, standardized procedures, etc.). The file is then sent to the ACPR, for validation of the VAS agent status.

Lemonway’s support ensures speed and peace of mind for VAS, in addition to guaranteeing the success of obtaining payment agent status. In addition, Lemonway is the first payment institution to have obtained agent status in France for VAS. Thanks to its expertise in the VAS sector, Lemonway offers tailor-made support, combining a thorough understanding of regulations and taking into account the specificities of each VAS, particularly in terms of billing.

As a pan-European PSP, Lemonway has transferred its French Payment Institution license to all European Union countries. Our teams, therefore, support VAS throughout Europe with a simple and integrated technological solution. Do you have a project? Any questions? Tell us about your needs!


Marketplaces shifting smoothly into PSD2