PSP License Services for Payment Businesses

You need a payments authorization when your business holds client money or performs regulated payment services. Four models cover most cases:

• Card gateways and acquirers. Accepting card payments for merchants is a regulated service. A gateway that never holds merchant funds can often run as a technical provider or an agent of a licensed acquirer. Once you settle funds yourself, you need your own license.
• Money remitters. Sending money across corridors is money remittance. In Europe it carries the lowest capital tier, EUR 20,000, though the compliance workload stays heavy. US money transmission runs on separate state-level licenses. Multi-corridor plans pair well with our cross-border payments service.
• Wallets and stored balances. A product that holds customer balances issues electronic money. That points to the EMI route, not a plain PI license.
• Crypto fiat rails. Exchanges and on-ramps that touch client fiat usually pair a payments license with their crypto permissions.

Paperwork differs, but the checklist rhymes almost everywhere:

• Initial capital. Paid in and evidenced before filing. Europe tiers it at EUR 20,000 to EUR 125,000 for PIs and EUR 350,000 for EMIs; other markets set their own minimums.
• Ongoing own funds. Capital is not one-off. EU institutions recalculate own funds as volumes grow; an EMI holds at least 2% of average outstanding e-money.
• Local substance. Most markets expect a registered office and management that actually sits in the licensing country. Depth varies by jurisdiction.
• Fit and proper people. Directors, senior managers, and qualifying shareholders pass background checks on integrity and experience.
• An AML/CFT program. Written policies, customer screening, transaction monitoring, reporting lines, and a named compliance officer or MLRO.
• A safeguarding arrangement. Client funds sit in segregated accounts or carry insurance, operational before launch, not promised after it. Canadian registrants face the same logic: risk-management and safeguarding frameworks became mandatory on September 8, 2025.
• A program of operations. Business plan, financial forecasts, governance map, and a wind-down plan. The FCA expects tailored documents and rejects generic templates.

Expect the regulator to test every document against your actual payment flows.

Cost and time follow four drivers:

• Capital. The largest item by far: EUR 20,000 to EUR 350,000 in Europe depending on route. It stays yours, held in the company; it is not a fee.
• Regulator fees. They vary by market and firm size. The FCA application fee is non-refundable. Canada charges a CAD 2,500 application fee. EU state levies stay modest.
• Preparation. Entity setup, substance, and the compliance build usually take several months. Your readiness moves this number more than anything else.
• Assessment. European law gives regulators a three-month decision window for complete files, with extensions in practice. The FCA allocates a case officer within 20 working days and decides after review. The decision itself belongs to the regulator. Preparation is the part you control.

The license starts the obligations; it does not end them:

• Safeguarding upkeep. Reconcile client funds daily and audit the arrangement as required.
• AML/CFT operations. Run screening and monitoring continuously, report suspicious activity, and train staff.
• Regulatory reporting. File periodic returns. Canadian registrants submit an annual report to the Bank of Canada.
• Change approvals. New shareholders, new services, and new branches usually need regulatory approval first. Change-in-control filings are a standard trigger.
• Consumer rules. Complaints handling, disclosures, and conduct requirements apply once you serve users. The UK adds its Consumer Duty on top.

What separates them

The fund-holding row settles a common confusion. Licensed payment and e-money institutions do hold client money: PSD2 requires segregated accounts at a credit institution or an insurance arrangement (Article 10). Unlicensed processors work the other way. They pass instructions between banks without taking possession of the funds, which keeps them outside the licensing perimeter in most markets. The moment such a processor takes possession, the exemption ends. Capital comes from PSD2 Article 7: EUR 125,000 for execution, acquiring, and payment-instrument issuance services, EUR 50,000 where the only service is payment initiation, EUR 20,000 for pure remittance. An EMI needs EUR 350,000 under the E-Money Directive. Ongoing own funds then scale with volumes. If your product stores customer balances, the EMI route is usually the fit. Our EMI license page covers the full application picture, and our EMI explainer walks through the basics.

Five markets show how much the instrument varies:

Choose the market from customers, corridors, and banking partners. An EU license wins when you serve the single market. Canada suits North American settlement flows. Ghana and Kenya fit corridor-heavy remittance businesses with local operations. Banking access shapes the choice as much as the license does. We compare the options against your plan before recommending one.

One coordinated team handles the whole file: corporate, legal, compliance, and banking, led by a single project lead.

• Scoping is jurisdiction-neutral. The recommendation follows your model and market, not our office locations.
• Formation, capital, and substance build in parallel with the compliance program.
• Documentation is drafted around your actual payment flows, not template language.
• We talk to the regulator directly until the decision lands.
• Pricing is agreed before engagement, with support continuing after authorization.

Formation, licensing, and administration run under one roof, so clients hold one contract for the whole project. Not sure which authorization fits your model? Schedule a free consultation with LegalBison. We will name the right license, or tell you when you do not need one.

Contact Us