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Payment businesses starting in the UK with modest volumes register as a small payment institution to trade under FCA supervision without initial capital, then move to authorisation as they grow.
Selected engagements from more than 250 licences obtained since 2013, for payment, e-money and cryptoasset firms.
Volkswagen
Payment InstitutionObtained Nexpay’s FCA Authorised Payment Institution licence.
Obtained Orbital’s FCA Authorised Payment Institution licence.
Payment InstitutionObtained Oval’s FCA Authorised Payment Institution licence with open banking permissions.
Our realistic timeline from submission to decision.
Safeguarding, operating and settlement accounts opened alongside the application, so you trade on authorisation.
We assemble your team: directors and an MLRO.
The licence, the requirements, the cost and the timing for your business.
You will need directors and a senior manager with payments experience, and an MLRO, none of whom has a money laundering or other financial crime conviction.
One programme, from scoping to launch. Speak to an expert about this licence.
Outcome. SPI registration granted, with compliance policies and regulatory reporting in place.
Requirements, capital, timing, fees and common questions, drawn from the regulator’s own publications.
A business that provides payment services as a regular occupation in the UK needs FCA authorisation or registration. Registration as a small payment institution is the route for a business whose payment volumes stay within the €3 million monthly average and which does not need the open banking services or access to other markets. It suits remittance businesses, merchant payment services and payment account providers at the start of their growth, and businesses testing a payment product in the UK before committing the capital that authorisation requires.
A business that will issue stored value needs e-money authorisation or registration instead. A business that expects to pass the limit within its plan applies for authorisation as a payment institution from the outset.
| Small payment institution | Authorised payment institution | |
|---|---|---|
| Status | Registered | Authorised |
| Monthly payment transactions | Average not above €3 million over 12 months, including UK agents | No limit |
| Payment accounts, payment execution, payment instruments, card acquiring, money remittance | Permitted | Permitted |
| Payment initiation and account information | Not permitted | Permitted |
| Initial capital | None | €20,000, €50,000 or €125,000 by service |
| Application fee | £1,130, category 3 | £2,820 or £5,640 |
| Safeguarding | Voluntary | Required |
| Geography | UK only; no passporting | UK; no passporting |
The services open to a small payment institution are operating payment accounts and executing transactions on them, issuing payment instruments, acquiring card transactions and money remittance. Payment initiation and account information require authorisation.
Regulation 14 of the Payment Services Regulations 2017 sets the conditions for registration. An applicant shows all of the following.
Safeguarding under regulation 23 is voluntary for a small payment institution. Banks and customers expect it, and most small payment institutions safeguard. A firm that safeguards segregates customer funds and, by the end of the business day after receipt, places them in a separate account with an authorised credit institution or the Bank of England, or in secure liquid assets, or covers them with an insurance policy or comparable guarantee. Our safeguarding service sets out the arrangements.
| Figure | Value | Source |
|---|---|---|
| Statutory decision period | 3 months from a complete application; 12 months maximum | Payment Services Regulations 2017, regulation 9, applied to registration by regulation 15 |
| Application preparation | 4 to 6 weeks | From instruction to submission, including banking in parallel |
| Our realistic timeline | 3 to 4 months after submission | Our own figure, from the regulator’s published data and our applications |
Regulator figures are quoted as published and converted to months. Our realistic timeline assumes a complete, well-prepared application.
| Item | Amount | Notes |
|---|---|---|
| Application fee | £1,130 | FCA pricing category 3; paid on submission |
| Initial capital | None | No initial capital requirement for a small payment institution |
| Annual fee | £652 | Fee-block G.4 flat fee for small payment institutions, 2026/27 |
| Professional fees | Fixed | Quoted after scoping |
The FCA publishes the reasons it rejects or returns applications, and they apply to registration as they do to authorisation.
A small payment institution applies for authorisation as a payment institution when its monthly average of payment transactions is set to pass €3 million, or when it wants to add payment initiation or account information services. Authorisation brings initial capital of €20,000, €50,000 or €125,000 by service, an application fee of £2,820 or £5,640, mandatory safeguarding and the FCA’s three-month statutory period. We plan the move against your business plan so authorisation is in place before you reach the limit.
A small payment institution needs an operating account and settlement accounts in the currencies it pays out, and a separate safeguarding account where it safeguards. We open each alongside the application. See banking and payment processing.
A monthly average of payment transactions, including those of its UK agents, not above €3 million over 12 months. A business set to pass it applies for authorisation as a payment institution.
The FCA application fee is £1,130 under pricing category 3, and the annual fee is a flat £652 under fee-block G.4 for 2026/27. There is no initial capital requirement.
The FCA must decide within three months of a complete application and within twelve months at most, under regulation 9 as applied to registration by regulation 15. We plan for three to four months after submission.
No. Payment initiation and account information services require authorisation as a payment institution.
Its head office, registered office or place of residence must be in the UK. There is no rule that directors must be resident.
A regulatory advisory firm to payment, e-money and cryptoasset companies since 2013, with more than 250 licences obtained in more than 60 countries. The firm builds licensed payment, e-money, crypto and stablecoin businesses: the licence, the team, the technology, the bank accounts and card issuing.
This guide is general information, not legal advice. Requirements and fees change, and the regulator’s own publications take precedence.
The licence, your team, banking and technology, delivered as one programme.