How to issue cards in the UK & Europe

Introduction

Card issuance is an Electronic Money Institution (EMI) activity regulated by the Financial Conduct Authority (FCA) in the UK and by central regulators in other European countries. To provide card issuance services, businesses must obtain the appropriate EMI licence. At Buckingham Capital Consulting, we specialise in guiding businesses through the intricate process of obtaining the necessary licences to issue cards. With over 12 years of experience, our expert team ensures your business meets all regulatory requirements set by the FCA and European regulators.

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Steps to obtain a card issuing licence

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Preparing your application

To issue cards, you must obtain the EMI licence from the FCA. Here’s what you need to know:

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Business plan and financial forecasts

The FCA will expect you to provide detailed information about your business plan, business model, financial forecasts, and a competitor analysis. Your business plan should include:

• A comprehensive overview of your business objectives and strategies.

• Financial forecasts covering at least three years, demonstrating the viability and sustainability of your business.

• An analysis of your competitors and the market landscape, showing your understanding of the market and how you plan to position your business.

 

Programme of operations

You need to clearly describe the card services you intend to provide. This should include:

• The types of cards you will issue (e.g., prepaid, virtual).

• The features and functionalities of these cards.

• The target market for your services.

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Business organisation and management structure

The FCA requires detailed information about your business organisation. This includes:

• The legal structure of your company.

• The management team, including the CEO, Chief Operations Officer (COO), and the Money Laundering Reporting Officer (MLRO).

• The qualifications and experience of your management team to demonstrate their capability to run the business effectively.

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Initial capital requirements

To obtain a licence, you must demonstrate that you have sufficient initial capital. The FCA typically requires:

• A minimum initial capital of £125,000. This ensures that your business has the financial stability to operate and meet its obligations.

 

Compliance and safeguarding measures

The FCA requires robust compliance and safeguarding measures to protect consumers and ensure the integrity of the financial system.

 

Funds safeguarding

You must outline how you will safeguard users' funds. This includes:

• Detailed procedures for segregating customer funds from your business funds.

• Measures to protect funds in the event of insolvency.

 

Compliance and governance arrangements

The FCA will scrutinise your compliance framework. You need to provide:

• A comprehensive compliance policy that includes procedures for ensuring compliance with all relevant regulations.

• Governance arrangements that outline the roles and responsibilities of your compliance team.

 

Security incident procedures

Your application must include detailed procedures for monitoring, handling, and following up on security incidents. This should cover:

• Steps for identifying and responding to security breaches.

• Processes for reporting incidents to the relevant authorities and affected customers.

 

Sensitive data processes

You must demonstrate how you will handle sensitive payment data securely. This includes:

• Procedures for data encryption, storage, and access control.

• Measures to ensure data privacy and compliance with data protection regulations.

 

Business continuity measures

The FCA requires a robust business continuity plan to ensure your operations can continue in the event of a disruption. Your plan should include:

• Strategies for dealing with various types of disruptions (e.g., IT failures, natural disasters).

• Procedures for maintaining critical business functions during a crisis.

 

Submitting your application

Once you have prepared all necessary documentation, you will need to submit your application through the FCA’s online system, Connect. Your application should include:

• Detailed business plan and financial forecasts.

• Programme of operations.

• Business organisation description.

• Initial capital evidence.

• Funds safeguarding measures.

• Compliance and governance arrangements.

• Security incident procedures.

• Sensitive data processes.

• Business continuity measures.

• Security policy.

• Financial crime policy.

• Information on qualifying holders (shareholders with 10% or more ownership).

• Details of outsourcing arrangements.

• Information about your management team.

 

Application fee

The application fee for the electronic money institution is £5,000 in the UK and varies in European, depending on the regulator. This fee must be paid when submitting your application.

 

Regulatory review and approval

The FCA typically takes up to three months to review a complete application and make a decision. To avoid delays, ensure that your application is thorough and meets all regulatory conditions.

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Services enabled by the card issuing licence

Once regulated, you can offer a range of services, including:

• Issuing prepaid and virtual cards to consumers and businesses.

• Enabling customers to load funds onto their cards.

• Providing secure payment solutions for online and in-store purchases.

 

Conclusion

Navigating the licencing process for issuing cards in the UK can be complex, but with the right preparation and guidance, you can successfully obtain the necessary licences. Buckingham Capital Consulting is here to assist you at every step, ensuring that your application is complete, compliant, and stands the best chance of approval.

 

For more detailed information, consult the relevant regulatory resources or contact us for tailored advice and support.