Services provided by a Small Payment Institution Licence in the UK

 

A Small Payment Institution licence enables the licence holder to offer the following:

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- services enabling cash to be placed on a payment account and all of the operations required for operating a payment account;

- services enabling cash withdrawals from a payment account and all of the operations required for operating a payment account;

- the execution of payment transactions, including transfers of funds on a payment account with the user’s payment service provider or with another payment service provider, including, execution of direct debits, including one-off direct debits; execution of payment transactions through a payment card or a similar device; execution of credit transfers, including standing orders;

- the execution of payment transactions where the funds are covered by a credit line for a payment service user, including the execution of direct debits, including one-off direct debits; execution of payment transactions through a payment card or a similar device; execution of credit transfers, including standing orders;

- issuing payment instruments or acquiring payment transactions;

- money remittance;

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The UK regulator for Small Payment Institutions

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Small Payment Institutions are registered and supervised by the Financial Conduct Authority (FCA) under the Payment Services Regulations 2017. Applications are submitted through the FCA’s Connect system and applicants must demonstrate that they meet the conditions applicable to SPI registration.

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The UK regulations for Small Payment Institutions (SPI)

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Small Payment Institutions in the UK are primarily regulated under the Payment Services Regulations 2017 (PSRs 2017). These regulations establish the conditions for SPI registration and the ongoing requirements applying to payment service providers.

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Depending on the firm’s activities, other relevant requirements may include the Money Laundering Regulations, UK data protection law, financial crime obligations, payment-services conduct requirements and FCA rules and guidance.

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SPIs that elect to safeguard customer funds voluntarily are also subject to the applicable FCA safeguarding requirements, including CASS 15 from 7 May 2026.

 

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Key features of a Small Payment Institution (SPI) in the UK

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- Average monthly payment transactions must not exceed €3 million over the preceding 12 months, or the projected equivalent for a new firm.

- There is no prescribed initial capital requirement for an SPI.

- The firm must have its head office, registered office or place of residence in the UK.

- SPIs cannot provide payment initiation services (PIS) or account information services (AIS)

- Directors and managers must be of good repute and have appropriate skills and experience.

- Qualifying shareholders must be fit and proper.

- The firm must comply with applicable anti-money laundering requirements.

- Safeguarding is voluntary for SPIs. Where an SPI elects to safeguard, the applicable FCA safeguarding regime applies.

 

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Documents required as part of a Small Payment Institution (SPI) licence application

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An SPI application must clearly explain the firm's proposed payment services business and provide the supporting information required by the FCA. This will typically include:

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- programme of operations and financial information;

- details of the individuals responsible for the payment services business and management of the firm;

- details and forms for qualifying shareholders;

- AML and financial crime control arrangements;

- safeguarding arrangements, where applicable;

- procedures for incident reporting and managing sensitive payment data;

- arrangements for collecting relevant statistical information;

- security and security-related complaints policies;

- Money Laundering Regulations registration details, where applicable;

- outsourcing arrangements, where relevant; and

- details of proposed agents and branches, where applicable.

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The FCA expects policies and supporting documentation to be tailored to the applicant's actual business model rather than generic templates.

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How much does an SPI registration cost and how long does it take?

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The FCA application fee for a Small Payment Institution registration is £1,130 in 2026. The fee is payable when the application is submitted and is non-refundable.

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The FCA's current operational target for payment services and e-money authorisations and registrations is three months for complete applications and up to ten months for incomplete applications. Actual timing depends heavily on the quality and completeness of the submission and the issues raised during assessment.

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Updated August 2026

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