Unlocking the money transfers: Payment Service Provider (PSP) License


Each Payment Services Provider needs to get permission to officially act. Payment systems activities are subject to regulations, as they’re any operations related to customer funds. Different market-spaces have several groups of such permits: from permissions for payment-transactions to the creation of firms’ own currency. Our experts help entrepreneurs with getting license for an international PSP in the shortest possible time to start your activities as soon as possible.

Our team specializes in launching and licensing business-structures in plenty of business-areas. We provide comprehensive advice, in particular on issues related to PSP-licenses, crypto-permits, gambling-licenses and much more.

What is a PSP: Why Do You Need a PSP-License?

Globalization does not bypass any economic sector, including banking. This trend can be viewed from the perspective of the big economy, but it can also be viewed from the point of view of an ordinary customer of a regular banking institution. Payment permits are legal authorizations issued by regulatory authorities to allow PSPs to conduct transactions. There are different types of payment permits designed to meet the different needs of PSP-structures.

These payment-enterprises offer financial intermediation in implementation of customer payments, which include payment-transactions, cash withdrawals or deposits to accounts, and money transferring operations. In addition, such companies have the ability to accept payments from third parties, as well as carry out and provide fast transfer-services between various financial institutions in different regions.

Obtaining such a permit is critical for service providers to operate legally and offer service-list to customers. Normative standards for getting these permits vary based on the license type and jurisdiction. It’s mandatory for PSPs to understand regulative basis in their respective jurisdictions and meet the compulsory rules to get and maintain such permits. With a PSP-license you can provide next-mentioned service range:

  • ensuring the debiting of funds from the payer’s account;
  • related to the transfer of funds to the recipient’s account;
  • making payments via direct debit;
  • issuance and/or acquisition of payment tools;
  • migrant transferring operations;
  • issuance of electronic money;
  • a payment transaction realization.
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Due to tightening conditions in foreign banks, payment systems are gaining popularity. Some countries give opportunities for foreigners to create their own systems for a reasonable investment. You can use it both to attract third-party clients and for your own operations. It’s important to meet normative points of Regulator so it issues a permit that meets your objectives.

PSP-License Application Process

The modern world has completely moved from offline to online. Digital banks and payment systems have become new trends for entrepreneurs. This form of financial flow controlling has become popular when building business-processes and in the interaction of business owners with clients. Volume of e-money transfers is growing rapidly.

To obtain a permit, you must submit a corresponding application and a package of documentation to the regulative authority of the jurisdiction chosen by the entrepreneur. In addition, it is necessary to meet at least the following requirements (the list of such regulative parameters may vary and expand depending on the selected commercial space):

  • crystal clear financial reputation of the company’s management;
  • limiting monthly turnover if required by regulatory authorities;
  • presence of officially-registered office in the country in which application is submitted;
  • the activity must not violate the legislation of the state where the licensing takes place;
  • at least one company director needs to possess local residence in which the firm is registered.

Our experts accompany you at this procedure and help you cope with any difficulties, taking on the most difficult obligations and issues. The general set of actions that are necessary to obtain this type of commercial permit is as follows.

  1. License-market research. We’ll select licenses that meet your requirements and capabilities.
  2. Once you have completed your search for permits that match your business, you’ll be prompted to begin your permit process.
  3. Preparation of documents. Prepare state-required licensing documents. Our lawyers will monitor each document as part of the implementation of this clause.
  4. Filling out and submitting the application. After preparing the mandatory documents, we’ll advise you on how to complete application and submit the PSP-license procedure to government. Our company also undertakes interaction with regulative authorities.
  5. Business-license verification and compliance. We liaise with the licensing authority to ensure business-licenses are issued.
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Before obtaining a permit from the regulator, which in some countries is Central Bank, it is necessary to undergo identification. Founders of the organization (owners) and managers will be thoroughly checked. Having created a financial business, owners and managers need to be prepared for close attention from regulators and the fact that crises happen. The worst thing that can happen to an active payment system (besides the loss of a licensed permission) is the closure and/or freezing of accounts. In this case, the firm automatically goes into hibernation and has very little time to deal with the problem. In order not to interrupt operational activities, we always recommend opening not one account for the firm, but several active ones. This applies to both settlement and correspondent accounts.

Our specialists are happy to use their experience and professional knowledge to achieve the most effective and quick results for your commercial project. We will become your reliable support on this path. We provide a full cycle of work on obtaining financial permits in the EU and worldwide, starting from preparing a full package of documents, negotiating with legislative bodies of a particular jurisdiction, and ending with getting a licensed permission. We pass with you all the way from the beginning to the result, particularly, getting permission to conduct commercial activities.

Author of this article is Denys Chernyshov – CEO and founder of the world-famous law firm Eternity Law International.