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FAQs on the FCA Small Payment Institution registration application

What is a small payment institution?

A small payment institution (SPI) is a type of payment service provider that is authorised by the Financial Conduct Authority (FCA) to offer payment services within specific limits.


What payment services can a small payment institution offer?

A small payment institution can offer payment services such as money remittance, payment initiation, account information services, and currency exchange.


What are the key requirements to become a small payment institution?

To become a small payment institution, you must meet certain requirements, including having appropriate systems and controls, and AML/CFT measures in place.


How much initial capital is required to become a small payment institution?

Non applicable.


What are the advantages of becoming a small payment institution?

Becoming a small payment institution allows you to legally offer payment services, gain credibility with customers and partners, and access the payment services market.


Can a small payment institution passport its services across the European Economic Area (EEA)?

No. a small payment institution cannot passport its services across the EEA.


Is there a limit on the annual turnover of a small payment institution?

Yes, there is a turnover limit for a small payment institution, which is currently set at €3 million per month, across all payment services.


Can a small payment institution provide services to non-EEA customers?

Yes, a small payment institution can provide services to customers outside the EEA, subject to compliance with applicable regulations.


What are the reporting obligations for a small payment institution?

A small payment institution has reporting obligations to the FCA, including submitting financial reports, annual returns, and other relevant information.


Can a small payment institution use e-money for its operations?

No.


What are the AML/CFT obligations for a small payment institution?

A small payment institution must have robust AML/CFT policies and procedures in place to prevent money laundering and terrorist financing activities.


Is professional indemnity insurance required for a small payment institution?

No.


Can a small payment institution accept cash deposits?

No, a small payment institution cannot accept cash deposits as it is not authorised to operate as a bank.


Can a small payment institution issue prepaid cards?

No.


Are there restrictions on the types of currencies that a small payment institution can handle?

No, there are no specific restrictions on the types of currencies that a small payment institution can handle, but compliance with anti-money laundering regulations is essential.


How long does it take to obtain a small payment institution registration?

The timeframe for obtaining a small payment institution registration can vary, but it typically takes 3-6 months from the submission of the application to the FCA's decision.


Is ongoing compliance monitoring required for a small payment institution?

Yes, a small payment institution must have robust compliance monitoring procedures in place to ensure ongoing adherence to regulatory requirements.


Can a small payment institution engage in agent or branch relationships?

Yes, a small payment institution can establish agent or branch relationships to extend its payment services reach, subject to regulatory oversight and agreements.


Can a small payment institution provide payment services to regulated entities?

Yes, a small payment institution can provide payment services to regulated entities, such as banks and other financial institutions.


What happens if a small payment institution fails to meet its regulatory obligations?

Failure to meet regulatory obligations can result in enforcement action, fines, suspension or revocation of registration, or other regulatory consequences.


What changes need to be notified to the FCA for a small payment institution?

A small payment institution must notify the FCA of significant changes to its business, including changes in ownership, control, key personnel, and material business activities.


Can a small payment institution offer additional financial services beyond payment services?

A small payment institution is primarily authorised to provide payment services, but may be able to offer other limited financial services subject to regulatory permissions.


Can a small payment institution merge or be acquired by another entity?

Yes, a small payment institution can merge with or be acquired by another entity, but regulatory approval and notifications are typically required.


Can an FCA small payment institution offer services to retail customers?

Yes, a small payment institution can offer services to retail customers, subject to compliance with applicable regulations and consumer protection measures.



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