PSP License in the United Kingdom
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A Payment Service Provider (PSP) License in the UK allows companies to process transactions, facilitate money transfers, and offer payment services under the Payment Services Regulations 2017. Regulated by the Financial Conduct Authority (FCA).
Access to the UK’s FinTech Market
The UK is a leading hub for payment institutions (PIs) and electronic money institutions (EMIs), offering access to one of the largest customer bases in Europe.
What are the Legal Requirements in PSP License in the UK?
UK-Based Office & Company Registration
A PSP must have a registered office in the UK and conduct part of its payment operations within the country.
Business Plan & Financial Forecasts
Applicants must submit a detailed business model, including payment services offered, revenue projections for 3-5 years, and operational strategies.
Capital Requirements
- €20,000–€125,000, depending on the type of services and license category.
- No capital requirements for SPI licenses, making them accessible to startups.
Client Fund Protection Mechanisms
Businesses must prove they have secure fund segregation policies to protect customer deposits (applicable to API license holders).
IT Infrastructure & Cybersecurity
A robust IT infrastructure must be in place to support payment transactions, ensure GDPR compliance, and protect against cyber threats.
Regulatory Compliance & Management Team
• Directors, shareholders, and key personnel must pass FCA’s fit and proper test.
• Strong AML (Anti-Money Laundering) and KYC (Know Your Customer) policies must be implemented to detect fraud and prevent financial crimes.
7 STEPS TO GET PSP LICENCE IN THE UK
Company Formation
A PSP must be incorporated as a UK-based legal entity. This includes company registration with Companies House, appointing at least one director and one shareholder, and establishing a registered office in the UK.
Business Plan Preparation
Applicants must submit a detailed business plan outlining their payment services, financial forecasts, risk management strategies, and operational procedures. This document is crucial for FCA approval.
Capital Requirements
Depending on the license type, PSPs must meet the following capital requirements:
- €20,000–€125,000 for API licenses, based on the services provided.
- • No capital requirement for SPI licenses, making them ideal for startups.
Regulatory & Compliance Measures
Companies must implement AML (Anti-Money Laundering) and KYC (Know Your Customer) policies, ensuring strict compliance with FCA regulations. Cybersecurity and transaction monitoring systems must also be in place to prevent fraud.
Application Submission
The full PSP License application must be submitted via the FCA Connect portal, including business documents, compliance policies, and financial statements. FCA may request additional details or conduct interviews with key personnel.
FCA Review Process
The FCA assesses the application within 3–12 months, depending on its complexity and the completeness of the submitted documents. Companies may need to provide further explanations or attend compliance interviews.
License Approval & Compliance Obligations
Once approved, the company receives its PSP License, allowing it to legally operate as a payment service provider. The business must comply with ongoing FCA reporting, AML regulations, and periodic audits to maintain its license.
Frequently Asked Questions
Still have a questions?
How long does it take to obtain a PSP License in the UK?
The FCA approval process takes 3–12 months, depending on application completeness and regulatory checks.
What is the minimum capital requirement for a PSP License?
Capital requirements range from €20,000 to €125,000, depending on the license type. SPI licenses have no capital requirement.
Do I need a physical office in the UK?
Yes, the PSP must have a registered UK office and conduct part of its business from within the country.
What are the FCA application fees for a PSP License?
- £1,500–£5,000 for individual applicants, depending on services offered.
- £5,000 for an EMI license.
- £500 for small private institutions providing limited services.
Are PSP transactions VAT-exempt?
Yes, payment services under a PSP License are generally exempt from VAT in the UK.
Can PSP-licensed companies operate in the EU?
Yes, through partnerships or passporting agreements, PSPs can operate in certain EEA countries despite Brexit.
OUR SERVICES INCLUDE
Company Registration & Licensing Support
We assist in company formation, PSP License application submission, and FCA compliance.
Business Plan & Financial Documentation
Our team prepares business plans, financial projections, and operational strategies tailored to FCA requirements.
Compliance & Risk Management
We develop AML/KYC frameworks, transaction monitoring procedures, and cybersecurity policies for regulatory approval.
Capital & Financial Planning
We provide guidance on capital structuring, fund segregation mechanisms, and financial risk management.
Ongoing Regulatory Compliance & Audit Support
We offer continuous FCA reporting assistance, risk management advisory, and post-licensing support.
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