IntroductionAuthorised Payment Institution

We can help you set up your authorised payment institution (API) in the UK.

UK remittance (money transfer) firms are regulated by the Financial Conduct Authority (FCA) under the Payment Services Directive 2009, and by HMRC under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and associated subsequent guidance.

The Financial Conduct Authority has a two-tier regulatory structure for payment institutions under the PSD:

  • Small Payment Institution (SPI)
  • Authorised Payment Institution (API)

All companies operating a remittance (money transfer) service must also possess a money transmitter licence from HMRC.

Under each of the FCA licences there are a number of shared provisions applicable to all companies operating in the market, as well as requirements and permissions specific to each type of licence.  For instance, API licensed firms are required to maintain minimum capital levels, whereas this condition does not apply to those holding an SPI licence.

Capital requirements for authorised payment institutions:

Payment services (see Schedule 1 to the PSRs)Initial capital required
Money remittanceEUR 20,000
Execution of payment transactions where payer’s consent for execution is given via a telecommunication, digital or IT device and payment is made to the telecommunication, IT system or network operator acting only as an intermediary between the payment service user and the supplier of the goods or services.EUR 50,000
Payment institutions providing other services, that is those covered in Schedule 1 Part 1(1)(a) to (1)(e) of the PSRs.EUR 125,000

SPI or API?

 

Authorised Payment Institution – Application Requirements

The API licence application process is much more in-depth than the SPI licence.  A large amount of documentation must be drafted for this licence, including a full business plan, a detailed programme of operations, risk management plan, business continuity plan, etc.  This is a more serious undertaking and involves considerable preparation by both our firm and the applicant.

Whilst daunting for some businesses, it can also present an excellent opportunity to formalise the policies and procedures in your business and lay a solid foundation for its continued growth.  It can lead to significant gains in terms of process efficiency, minimisation of risk, and reduction in manual processing and therefore overheads.

The Authorised Payment Institution (API) Application Process

API Compliance can handle the application process from start to finish.  We offer a flat-fee structure for the application which includes unlimited follow-up with the FCA until the licence is granted.

For more information please contact us.

Upgrading to Authorised Payment Institution Status

Small Payment Institutions (SPIs) looking to upgrade to API status should contact us to discuss their requirements.

Whilst the application process can be daunting some, firms should also consider the excellent opportunity this presents to their business to consolidate and develop their internal controls with the help of experienced third-party professionals – any ambitious firm looking to grow and open in new markets should do so from a firm base, having removed as much manual processing as possible and with adequate, scalable reporting systems in place that will enable it to grow without being hindered by internal limitations.

How long will it take to get set up?

We recognise that each company is unique and that the time required in preparing the application will vary depending on their specifics, but we aim to have all applications completed within 4-6 weeks.

The FCA will process a complete application within 3 months of receipt of a complete application.

You should allow a minimum of 4-5 months to get the company up and running.

What will it cost?

The API licence is a large project and will require much more preparation than an SPI licence, including far more contact time between us and the applicant.

Contact us today for a custom quote for your project here and to arrange a free 15 minute consultation.