Procedure to obtain an Authorised Payment Institution license

In this article, we discuss how to obtain the authorised payment institution license. Across all EEA (European Economic Area) countries, the regulations are the same with regards to becoming an API, or formally, an authorised payment institution.

If you wish to offer payment services, such as online or in-store payment processing, money transfer, offer payment accounts or offer account or payment initiation services, then you must apply

and become an authorised or a small payment institution (API or SPI).

In the UK, you can apply and become an authorised payment institution (API) or a small payment institution (SPI) with the Financial Conduct Authority. Below, we will discuss the differences between the two options.

1. Choose the license

Option 1 - Become an Authorised Payment Institution (API)

Under this option, when your business becomes authorised, it means that you can offer payment services and provide them across all EEA (European Economic Area) countries, even though your license is obtained in a single EEA state e.g. the UK. For example, if you were to obtain an authorised payment institution (API) license in the UK, you can then provide your e-money and payment services to people in countries such as Spain, France, Italy and Ireland.

Initial Capital Requirement: the initial capital required under this option varies from EUR 20,000 to 125,000 depending on the payment activity you wish to offer. For money remittance businesses the amount will be EUR20,000 whereas for businesses wishing to offer merchant acquiring services the amount will be EUR125,000. You need to show this money in a bank account with the submission of your license application. You are not required to 'freeze' this money with a bank or the regulator. In fact, you can use this money as you wish - the key is to show to the regulator that you have a balance equalling to this amount.