Payments and banking services in Andorra: key rules, fees and client rights

Reading time: 9–11 minutes

🏛️ Why this law is essential to Andorra’s banking system

Law 8/2018, consolidated in 2019, is the key pillar governing how payments work in Andorra: transfers, cards, charges, digital services and all day-to-day banking operations.

It is a technical law, but its effects are directly felt by every resident, business and professional who works with Andorran banks. In practice, it is a fundamental element for anyone living or operating in the country.

➤ For a general overview of the sector, you can read Andorra’s banking system: Andorran banks, financial regulation and international presencel.

🌐 The real objectives of the law: European alignment and client protection

The strategic context of this law is multifaceted, but several concrete aims clearly stand out:

• European integration: Andorra adopts EU payment rules to operate with the euro and modernise its financial system.
• Modernisation of the banking sector: the goal is to improve competitiveness and international trust.
• Consumer protection: more information, transparency and rights for the most vulnerable party.
• Encouraging competition: theoretically opening the door to fintechs and non-bank operators, although the market remains highly concentrated.

In practical terms, these objectives fall into three major blocks.

1️⃣ Aligning Andorra with EU standards (PSD2)

The Monetary Agreement requires Andorra to apply European payment regulations.
This law is the Andorran equivalent of PSD2 and governs:

• access to bank accounts (open banking)
• security for electronic payments
• consumer protection
• transparency in fees
• requirements for banks and operators

➤ To better understand the Monetary Agreement, you can read The Monetary Agreement between Andorra and the European Union: origin, meaning and impact on Andorra’s financial system.

The law is also the foundation enabling Andorra to function normally within SEPA (Single Euro Payments Area).

➤ For a broader European context, you can also read SEPA in Andorra: what it is, why it exists and how it works within the Andorran financial system.

2️⃣ Defining who may offer payment services — and under what conditions

The law clearly identifies which entities fall under its scope:

• Andorran banks
• payment institutions
• electronic money institutions
• foreign operators authorised by the AFA

All must meet capital, governance, security and fund-protection requirements.

3️⃣ Ensuring security, information and consumer rights

The objective is simple yet ambitious: clients must understand what they pay, how each service works and what they are entitled to request.

The law reinforces:

• transparency
• security
• pre- and post-contractual information
• strong authentication for online payments
• formal complaint procedures

💳 What Law 8/2018 regulates in practice

In practical terms, the law addresses several essential areas.

🏦 Operators authorised to provide payment services

The law specifies which entities may operate: Andorran banks, payment institutions, electronic money institutions and AFA-authorised third parties.

Any operator must comply with:

• minimum capital
• an appropriate internal structure
• security measures
• safeguarding of client funds
• liability rules

💼 Payment services recognised by the law

The operational scope is a numerus clausus (closed list) and includes:

• deposits and withdrawals of funds
• transfers (SEPA and international)
• card payments
• direct debits
• execution of online payment orders

The law also defines concepts such as payer, payee, fee, direct debit, charge, and others.

🧑‍💼 Client rights in banking operations

One of the main aims is to clarify what users may legitimately expect. Key rights include:

• prior information on fees and timeframes, often opaque in practice
• the right to cancel orders
• protection in case of errors

A core rule:

If a payment has not been authorised by the client, the bank must reimburse the amount without delay, unless it can prove negligence by the client.

🧾 Information obligations for banks

Beyond client rights, the law imposes obligations on operators, requiring them to provide information on:

• applied fees
• execution times
• currencies and exchange rates used
• durable, easily accessible information channels

This transparency is especially relevant for businesses and self-employed professionals.

💠 Regulation of electronic money

Although most people intuitively understand the concept, electronic money has a specific legal definition: monetary value stored electronically, accepted as a means of payment by third parties other than the issuer. In essence, anything that is not physical cash — banknotes or coins — but is accepted as a payment method.

The regulation defines:

• how electronic money must be issued
• the security requirements that apply
• how client funds must be safeguarded
• rights of use and redemption

🔓 Third-party access to accounts (PSD2 model)

PSD2 — the EU’s second payment services directive — governs third-party access to bank accounts with the client’s explicit authorisation.

Examples include:

• account aggregators (apps showing information from multiple accounts, balance consultation, etc.)
• payment initiators (systems transmitting payment orders, such as payroll or recurring charges)
• advanced digital services, such as fintech tools, invoicing platforms, e-commerce systems, wealth-management applications…

In Andorra, this access exists but is tightly supervised by the AFA.

📌 Practical consequences for users, businesses and banks

👤 Impact on individuals

Key points include:

• strengthened fraud protection: immediate reimbursement for unauthorised charges
• clearer information: predictable fees and timeframes
• safer online purchases thanks to strong authentication (similar to 3D Secure 2)

🧾 Impact on businesses and freelancers

Andorran companies also benefit from:

• full transparency on bank fees, making comparison easier
• security in both incoming and outgoing payments
• future opportunities for automation: payment initiators, automatic reconciliation, open banking

🏛️ Impact on the Andorran financial sector

For banks and financial operators, obligations increase:

• stricter AFA supervision
• technological and regulatory upgrades to EU standards
• SEPA integration and improved international flows

However, even with stronger security, not all international transactions are possible or frictionless. To understand why, you can consult The FATF and MONEYVAL Grey List: What It Really Means and How It Affects Andorra.

🧭 What all this means for a resident or newcomer

For any person or company operating in Andorra, this law has several implications:

• Greater security and transparency when opening an account
  Banks must clearly explain requirements, fees and timeframes.
  ➤ If you are considering relocating, the article Types of residence in Andorra: all administrative categories may be useful.
• More transparent and secure international transfers
  Shorter and defined timeframes (1 business day for SEPA), clearer costs and harmonised rules.
• More secure digital payments
  Particularly relevant for e-commerce and digital services.
• Specific rights and protections for clients
  Reimbursement of unauthorised payments, transparency in currency conversions, and structured incident management.
• Businesses working with foreign clients gain reliability
  Payments aligned with European standards, stronger international recognition and reduced operational risk.

Conclusion

Law 8/2018 on payment services and electronic money is far more than a simple alignment with European regulations: it is the framework that guarantees a secure, transparent and internationally recognised payment system for Andorra.

For a country long associated with opacity, this evolution is part of its broader trajectory toward full integration into the global financial system.
➤ If you want to understand this transformation in greater depth, you can read International Evolution of Andorra: From Tradition to the Global World.

This law affects all residents and businesses in the Principality: account opening, payments, digital operations and everyday financial activity. It is therefore a central piece of the country’s economic infrastructure.

If you believe your rights are being breached, or if you have doubts about a specific operation, you can explain your case through our form. We will be pleased to assist you.

Last updated: December 2025