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EMI and PSP License – Licensing of Financial Services in Europe
Offering of Wallet & Payment Services
Anyone who wants to offer wallet and payment services to customers in the EU requires a corresponding EMI and PSP license. This licensing is regulated throughout Europe by the EU Commission (EU Payment Services Directive 2015/2366 as amended on 25.11.2015) and must be transposed into national law by the individual EU member states. The application and authorization itself differ in nuances in the individual EU states.
However, there are mandatory rules for an EMI and PSP License – such as the necessary capitalization of € 350,000 – which must always be available and is the same in all EU and EFTA countries. Depending on the type of business model, smaller licenses can also be applied for, such as SEMI (Small E-Money Institution) or SPSP (Small Payment Service Provider), for which tiny amounts are deposited. It is, therefore, essential to think carefully about which license is required and, if necessary, to adapt the business model. We believe that, in some cases, a partnership with a financial investor might be a key to success. Please find out more about it on our dedicated website, Redchilli Capital.
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EMI and PSP License – When tu apply for which License?
It does not always have to be an EMI and PSP license – often, a SEMI and/or SPSP license is utterly sufficient if you do not need EU passporting rights. In such a case, the license will only be valid in the country in which it was requested. Unfortunately, more and more countries are restricting the allocation of e-money licenses or payment service provider licenses due to strict anti-money laundering laws. Finding suitable and willing banks to take on account relationships is also challenging.
So, expect an application time of at least 6-8 months for complete documents, which is also plausible. So do not think if someone promises you a license for a small amount in record time. For example, BaFin (the Federal Financial Supervisory Authority) in Germany granted Concardis a permit in a record-breaking four months. However, this company is not precisely a startup and has sufficient financial and personal substance.
Where to Apply for an EMI and PSP License?
We can apply for licenses in any EU member state, Switzerland, and Liechtenstein. Due to the current situation, we recommend applying for EMI and PSP licenses in Cyprus, the Czech Republic, Slovakia, Lithuania, and Ireland. Unlike Malta, competing with Cyprus or Luxembourg, all six locations provide the necessary banking infrastructure.
We have offices in all recommended locations and speak multiple languages, including French, Czech, and Greek, to handle local issues regarding the application for EMI and/or PSP licenses. Please talk to us about your strategic plans.
Simply contact us via our contact form, and our experts of TAXEDO LLP we will get in touch with you shortly.
When to use an EMI and PSP License?
Applicants use EMI/PSP-Licenses typically, but not exclusively, when they want to:
- Acceptance of customer money via bank transfer, credit card or even in Cryptos electronically – by private companies and companies from EU states and Offshore
- Processing / transfer of funds on behalf of third parties to third parties
- Direct Debits for customers
- No maximum number of customers or maximum amounts that can be accepted per customer – if the license itself is not limited
- Issuing debit cards and booking money on debit cards like Mastercard, Visa or Diners, and Amex
- Offering payment services to third parties
- Free custom definition of account management/transfer fees, etc.
- Merchant Account Openings for third-party payment processors
- Converting FIAT – various currencies – into electronic cryptocurrencies such as Bitcoin, Ether, Litecoin, and others
- Offering Wallet Services
- Act as Payment Services Provider
- Issuing E-Money
- Issuing Reward Cards
Whether an EMI or PSP license – Passporting throughout the EU can deliver high value and keeps you flexible.
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