How to obtain an E-money and Payment license in the United Kingdom

If you are looking to operate in the UK, your services must be authorised by the UK`s regulator -Financial Conduct Authority (FCA). Depending on which services you are planning to provide, you can obtain an E-money or Payment license in this country.

Advapay offers a broad range of legal, technical and business servicesin order to assist companies in the UK to start their operations:

  • 1) Business planning & consultancies
  • 2) Document preparation and submission, communication with the regulator
  • 3) Assistance in setting up a business and opening a safeguarding account
  • 4) Deployment of the technical solution and payment infrastructure
  • 5) Assistance in finding business partners

The UK`s fintech market overview:

The UK’s fintech market was recognised as a European fintech centre over the past years and it will very likely remain a front runner in the industry because of the regulatory approach that supports innovations of financial services.

The country holds the 2nd place in the Global Fintech ranking according to “The Global Fintech Index 2020”. Today, there are 401 Payment Institutions operating in the UK.

Brexit. The UK left the EU on 31 January 2020 with a Withdrawal Agreement. It has entered a transition period, which is due to operate until 31 December 2020. During the transition period, the EU law will continue to apply in the UK. When it comes to changes coming in force after 31 December 2020, FCA, the UK’s regulator, will inform later.

Doing business in the UK

Reasons to choose the UK as your regulator

  • Most of your customers reside in the UK.
  • Expertise and stability of the regulator.
  • Rules and processes developed during many years of working within the industry.
  • Nearly half of all licenses are issued the UK.
  • English – a main communication and documentation language.

Main requirements

  • The head office and registered office must be in the UK.
  • The company’s management should reside in the UK`s office on a daily basis.
  • On the day the license is obtained, the company must have a ready-to-operate IT system.

Terms:

Application acknowledgement

The UK`s regulator FCA acknowledges an application within 7 business days. A case officer is then assigned to the application, to assess the information provided and make a determination.

A decision on an application

FCA makes a decision on the application within:

  • 3 months of receipt (if FCA have all the information and evidence that they need), or
  • 12 months (if the application is incomplete) .

Fees

Registration fee

  • Authorised PI GBP 1,500 or GBP 5,000 (for payment institutions providing money remittance, payment initiation services and/or account information services, the licence fee is EUR 1500)
  • Authorised EMI GBP 5,000
  • Small PI or EMI – GBP 500

Annual fee

After services are authorised, every year companies must pay an annual fee to FCA. An annual fee amount is defined by FCA.

Documents

  • List of payment services planning to provide.
  • Governance arrangements and internal procedures.
  • Initial capital at the level required by the regulations to start your business.
  • Documents to evident your plans for obtaining a ‘safeguarding’ account with a UK or EEA bank.
  • Information about people responsible for payment services and who will manage your company.
  • Information about people with qualifying holdings in your firm (representing 10% or more of the capital or voting rights).
  • List of any agents acting on your behalf (if relevant).
  • Procedure for incident reporting, managing sensitive payment data, business continuity arrangements, principles and definitions used when collecting statistical data.
  • Security policy.
  • Information about the control mechanisms to meet your obligations under the Money Laundering Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

About the company: Advapay provides Digital Core Banking solutions and consulting for fintech companies and digital banks. More: www.advapay.eu