Payment Licenses in the UK: API, SPI, EMI and SEMI, What to Choose?

It is hard to imagine the modern world without electronic payments. The payment system is an integral element of the electronic cash flow. Commissions and fees, as well as a range of payment options, vary and are regulated by financial and market relations. While some entrepreneurs are looking for the most favorable payment terms for their business, others are creating their own payment systems. Let’s consider the key issues encountered by those wishing to join the sphere of financial services.

What jurisdiction to choose for payment system registration?

Country selection for the payment system registration directly depends on the geography of future activities. UK is the perfect jurisdiction for those wishing to work with the European market. This jurisdiction is characterized by a reliability, a loyal attitude of the regulator, and a clear statement of legislative norms.

British payment systems with a competent cross-border passport arrangement (‘passporting’) are recognized by banks throughout the European Union, which will allow you to easily open an account for clients’ funds safeguarding (safeguard account) both in the UK and abroad.

What payment system licenses are available in the UK?

The UK Financial Conduct Authority (FCA) offers to obtain an API (authorized payment institution) or a SPI (small payment institution) license for the provision of payment services, as well as an EMI (electronic money institution) or a SEMI (small electronic money institution) license for digital currencies issuing, depending on the nature and geography of the services provision.

What is the difference between the British EMI license and the SEMI?

EMI license allows you to provide a wide range of payment services (open IBAN accounts to your customers, issue your own payment cards, transfer funds in 29 currencies, accept international SWIFT payments) throughout the European Economic Area. But obtaining this type of license involves the depositing of an initial capital in the amount of EUR 350,000. This type of license is suitable for lovers of maximizing opportunities and experienced payment specialists.

SEMI license allows you to serve customers in the UK. Moreover, the average monthly turnover should not exceed 3 million euros. This type of license is suitable for beginner entrepreneurs.

What is the essence of UK API / SPI licenses?

Holders of API / SPI licenses can also provide services for opening accounts, storage of funds, receiving and transferring payments. But they cannot issue their own digital currency. API license allows you to work throughout the EU with unlimited turnover. But it requires the maintenance of authorized capital in the amount of 125,000 euros. SPI license limits the territory of the company’s activity within the UK and allows a maximum turnover of 3 million euros per month.

Impact of the EU on payment service providers licensing in the UK

Payment initiation services (PIS) and account information services (AIS) providers under the second EU Payment Services Directive (PSD2) must be licensed. The above services imply the access of the licensee’s clients to their accounts opened with other banks and payment systems. These options may be included in the full EMI / API licenses, but in this case companies must have a professional indemnity insurance policy.

How to get a UK payment license?

In order to obtain an API / SPI / EMI / SEMI license, it is necessary to collect a full package of documents for the company, its directors and shareholders, fill out application forms, explain the essence and prospects of future activities to FCA representatives in detail and correctly, undergo the passporting and obtain the coveted license. But it is better to entrust the license obtaining to professionals in this industry.

How long does it take to receive a payment license in the UK?

Depending on the preparedness of the application, the FCA review period can vary from 3 to 12 months. Unqualified submission of documents, the presence among the company’s key figures of persons whose reliability is questionable, can be fraught not only with a delay in consideration, but also with a refusal to issue a license.

We recommend entrusting the troubles and bureaucratic aspects associated with obtaining the payment license in the UK to the Mayon Solutions team of professionals. We will represent your company to FCA for license obtaining with the minimum time and costs, but with the maximum result. Our long-term experience in the field of registration of international companies, opening of bank and merchant accounts, licensing and tax planning will help to choose the optimal solution especially for you.

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