Obtain an FCA Licence with The Payment Practice

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Payment Institution licences enable firms to provide regulated payment services such as money remittance, deliverable FX, merchant acquiring, payment processing and bill payments. 

Unlike Electronic Money Institutions, Payment Institutions cannot store funds indefinitely. Any funds they come into contact with must be accompanied by a payment instruction and moved without undue delay.

Firms can operate under one of two regimes, depending on their scale, complexity and growth ambitions: 

• Small Payment Institution (SPI); or
• Authorised Payment Institution (API), 

Small Payment Institutions are registered with the FCA rather than fully authorised. They operate under a simplified regulatory framework, with transaction volume limits and lighter supervisory requirements. This route is typically suited to early-stage firms or UK-focused businesses with lower volumes. While there is no prescribed minimum capital requirement, firms must still demonstrate that they have appropriate systems and controls in place which are proportionate to their business model, including,  anti-money laundering , governance and oversight frameworks and risk management policies and procedures 

Authorised Payment Institutions are fully authorised by the FCA and operate without transaction limits. They are subject to the full regulatory framework, including capital requirements, safeguarding, governance, conduct requirements and operational resilience.

This model is designed for firms looking to scale, operate internationally or offer more complex services such as merchant acquiring. Initial capital requirements apply and vary depending on the specific payment services being provided.

Electronic money institution licences enable firms to provide services such as prepaid cards, digital wallets, stored-value products and e-money accounts. These firms can hold into customer funds indefinitely.

Firms can operate under one of two regimes, depending on their scale, complexity and growth ambitions:

• Small Electronic Money Institution (SEMI); or
• Authorised Electronic Money Institution (AEMI),

Small Electronic Money Institutions are registered rather than authorised. They operate under a simplified regulatory framework, with issuance and transaction volume limits and lighter supervisory requirements. This route is typically suited to pilot programmes or those operating at a smaller scale. While there is no prescribed minimum capital requirement, firms must still demonstrate that they have appropriate systems and controls in place which are proportionate to their business model, including anti-money laundering, governance and oversight frameworks and risk management policies and procedures.

Authorised Electronic Money Institutions are fully authorised by the FCA and operate without issuance limits. They are subject to the full regulatory framework, including capital requirements, safeguarding, governance, conduct requirements and operational resilience. This model is designed for firms looking to scale, operate internationally or deliver full e-money or card programmes. AEMI firms are subject to a minimum initial capital requirement of €350,000, along with ongoing own-funds requirements linked to e-money issuance volumes.

Open banking permissions are used by firms providing account information services and payment initiation services, allowing access to customer bank accounts via APIs rather than holding or issuing funds.

For open banking, firms may apply for either:

• Account Information Services (AIS); or
• Payment initiation services (PIS); or 
• A combination of both.

AIS firms access customer account data with consent but do not initiate payments or hold funds. There is no minimum capital requirement for AIS firms, but they must hold appropriate professional indemnity insurance and demonstrate strong data security, governance and operational resilience.

PIS firms initiate payments directly from customer bank accounts but must not hold client funds. PIS authorisation is required, with a minimum initial capital requirement of €50,000, alongside mandatory professional indemnity insurance calculated in line with regulatory formulas. PIS firms are subject to a higher level of supervisory scrutiny than AIS-only providers.your sales goals.

Cryptoasset firms registered under the Money Laundering Regulations (MLRs) are permitted to carry on activities such as cryptoasset exchange services, custody wallet provision and facilitating the transfer of cryptoassets.

These firms are supervised by the FCA for anti-money laundering, counter-terrorist financing and financial sanctions compliance only. To obtain registration, firms must demonstrate a clear understanding of the risks associated with their business model and show that they have robust, tailored systems and controls in place which are proportionate to their activities, including:

• A business-wide risk assessment (BWRA) that clearly identifies and mitigates crypto-specific risks, including money laundering, terrorist financing and proliferation financing 
• Anti-money laundering (AML) and financial crime controls, including customer due diligence, ongoing monitoring and suspicious activity reporting 
• Blockchain analytics and transaction monitoring capabilities appropriate to the firm’s risk exposure 
• Governance and oversight frameworks, including a clearly defined MLRO / nominated officer with appropriate seniority and independence 
• Risk management policies and procedures tailored specifically to cryptoasset activities (not generic or group-level only) 
• Travel Rule compliance, including the ability to collect, verify and transmit originator and beneficiary information with supporting systems and data flows 
• Outsourcing oversight arrangements, ensuring the firm retains full responsibility and can evidence ongoing monitoring and testing of third-party providers 
• Financial promotions controls to ensure communications are fair, clear and not misleading 

Firms must also demonstrate that their control framework is scalable and will remain effective as the business grows, with clear plans for ongoing development and enhancement. 

Registered cryptoasset firms are subject to ongoing supervisory engagement with the FCA and are expected to maintain effective systems and controls throughout their lifecycle. Registration is not a one-off exercise and firms must continue to meet the requirements of the MLRs on an ongoing basis.