United Kingdom · Authorisation
FCA Payment Institution Authorisation in the UK
Authorisation to provide payment services — acquiring, initiation or remittance — under the Payment Services Regulations 2017, without issuing e-money.
At a glance
Is this the right permission?
Three tests. All three must be true.
A Payment Institution is defined entirely by which services you apply for — so the scoping decision is also the pricing decision. Get it wrong in either direction and you either overpay on capital or need a second application.
You move money, but never store it
You execute payments, acquire card transactions, remit funds or initiate payments — without ever issuing stored value your customers hold. The moment you hold a redeemable balance you are issuing e-money, and you need an EMI licence instead.
You know which services you need
Your capital requirement is set by the highest-tier service you are granted: £125,000 for execution or merchant acquiring, £50,000 for payment initiation only, £20,000 for money remittance only. Over-declaring services you will not use is the most common way applicants inflate their own capital bill.
You can incorporate in the UK
Unlike EMI, there is no branch route. The applicant itself must be a UK-incorporated company with its head office here — a UK branch of a foreign parent cannot apply for Payment Institution authorisation at all.
Below defined volume thresholds, Small Payment Institution registration is a lighter alternative — no minimum capital, but a narrower permitted scope. We scope which of the three routes actually fits before any documentation work starts.
Payment initiation and account information change the shape of the application
If you provide only PIS or AIS, the safeguarding requirements do not apply to you at all — you never take possession of client funds. But you do need Professional Indemnity Insurance meeting EBA minimum-amount guidelines, evidenced by an insurer's quote at application stage. It is the one part of the pack that gets simpler and more expensive at the same time.
Overview
Payment services authorisation, without the e-money permission.
A Payment Institution licence covers acquiring, payment initiation, remittance and related services without the e-money issuance permission an EMI carries. The capital requirement depends on which services you actually provide, not a flat figure — and there's a real structural difference from EMI worth knowing before you scope anything else.
Small Payment Institution (SPI) is the lighter-touch route below defined volume thresholds — no minimum capital, but a smaller permitted scope.
Permitted services
What this licence actually lets you do.
A Payment Institution's authorisation is defined entirely by which of the eight payment services in Schedule 1, Part 1 of the Payment Services Regulations 2017 you apply for and are granted — there's no separate "core" activity the way e-money issuance is for an EMI. Your capital requirement is set by the highest-tier service you're authorised for, so scoping this list precisely is the single biggest lever on cost. Listed below in the Schedule's own order, with its own wording.
Cash Placement
Services enabling cash to be placed on a payment account, and all the operations required for operating a payment account.
PSR 2017, Sch. 1, Part 1(a)
Cash Withdrawal
Services enabling cash withdrawals from a payment account, and all the operations required for operating a payment account.
PSR 2017, Sch. 1, Part 1(b)
Payment Execution
Execution of payment transactions, including transfers of funds on a payment account with the user's payment service provider or with another payment service provider.
PSR 2017, Sch. 1, Part 1(c)
Credit-Funded Execution
Execution of payment transactions where the funds are covered by a credit line for a payment service user.
PSR 2017, Sch. 1, Part 1(d)
Issuing & Acquiring
Issuing of payment instruments, or acquiring of payment transactions.
PSR 2017, Sch. 1, Part 1(e)
Money Remittance
Money remittance.
PSR 2017, Sch. 1, Part 1(f)
Payment Initiation
Payment initiation services.
PSR 2017, Sch. 1, Part 1(g)
Account Information
Account information services.
PSR 2017, Sch. 1, Part 1(h)
Card Acquiring (Merchant Acquiring)
Paragraph (e) covers two different things — issuing payment instruments to your own customers, and acquiring: contracting with a merchant to accept and process their card payments. PSR 2017 regulation 2 defines acquiring as a service provided by contracting with a payee to accept and process payment transactions that result in a transfer of funds to that payee. This is the highest capital tier — £125,000 — alongside payment execution. The FCA's own application form asks applicants to self-classify by business model at the outset — Money Remitter, Non-Bank Card Issuer, Bill Payment Service Provider, Merchant Acquirer or Payment Initiator — so know which one you are before you start.
PSR 2017, Sch. 1, Part 1(e); definition at reg 2
PIS/AIS-Only Firms Skip Safeguarding Entirely — But Not PII
If you're applying for payment initiation or account information services only (paragraphs (g)/(h)), the safeguarding section of the application doesn't apply to you at all — it only covers firms providing services (a)–(f), because PIS/AIS firms never take possession of client funds in the first place. That's a genuine, favourable difference from every other permitted service. The trade-off: you still need Professional Indemnity Insurance meeting EBA minimum-amount guidelines, evidenced by an insurer's quote at application stage, whichever of the two you provide. And the general rule still applies — the FCA authorises you only for the services you actually apply for, so adding a service later means a Variation of Permission application, not a quick add-on.
FCA API application form, Sections 6.1 and 17
Requirements in detail
What you actually need.
Incorporation
Here's a genuine difference from EMI: there's no branch route for a Payment Institution. The applicant itself has to be a UK-incorporated company with its head office here — a UK branch of a foreign parent can't apply for PI authorisation at all.
Capital
£125,000 if you provide payment execution or merchant acquiring (PSR 2017, Sch. 1, Part 1(a)–(e)), £50,000 for payment initiation only (paragraph (g)), or £20,000 if you're limited to money remittance (paragraph (f)) — the FCA sets the figure by the highest-tier service you actually apply for, not a flat number. Account information services (paragraph (h)) carry no separate capital tier of their own, since an AIS-only firm never touches client funds. Small Payment Institution (SPI) is the lighter-touch route below defined volume thresholds, with no minimum capital but a smaller permitted scope.
Directors
No fixed minimum beyond ordinary company law's floor of one director, and no “four eyes” rule written into the Payment Services Regulations — but the same practical expectation applies as for EMI: the FCA wants to see genuine UK-based direction of the business, not a nominal board.
Governance & people
The same good-repute test as EMI applies to your directors and managers — evidenced honesty, competence and financial soundness — and anyone acquiring 10%+ of the business goes through the same qualifying-holding assessment. It's the same two-track process too: controllers file a Qualifying Holding (Controller) form, management and anyone responsible for running payment services day-to-day files a PSD Individual form — both demanding a full ten-year employment history with every gap explained, and a criminal record check no older than six months. The same correction applies as for EMI: standalone Payment Institutions aren't under SM&CR either. An MLRO is mandatory under the Money Laundering Regulations 2017, and if your firm is separately required to register with HMRC under those regulations, the FCA won't authorise you until that registration is confirmed. Once authorised, you'll calculate ongoing own-funds via Method A, B or C depending on your business model.
Ongoing obligations
Authorisation isn't a one-off event here either. Authorised Payment Institutions are allocated to FCA fee-block G3, with periodic fees and levies calculated from your own projected relevant income — plus an FOS industry-block levy unless you qualify for an exemption. You'll need the ability to file regulatory returns through RegData, agree to supply financial information at set intervals, and — where a statutory auditor is required under UK company law — name them as part of your application. Budget for this alongside the initial capital figure, not as an afterthought once you're live.
Not sure this is the right permission?
A scoping call maps your regulatory perimeter and confirms which regime actually applies — before any documentation work starts.
Time & cost
What actually drives both.
Payment Institution files typically move faster than EMI files, because there is no e-money issuance permission to assess. The constraint is usually scope clarity, not FCA capacity.
Scope drives everything downstream
Which Schedule 1 services you apply for determines your capital tier, whether safeguarding applies, whether you need PII, and how large the documentation pack is. Settling this in week one is what makes a six-month timeline achievable.
The statutory clock still pauses
Three months to determine a complete application, but each information request stops it. Well-prepared PI files tend to resolve in six to nine months; incomplete ones drift in exactly the same way EMI files do.
HMRC registration can gate authorisation
Where your firm is separately required to register with HMRC under the Money Laundering Regulations, the FCA will not authorise until that registration is confirmed. It is easy to miss when attention is on the FCA side of the process.
Individual forms expire
Directors and managers file PSD Individual forms; 10%+ holders file Qualifying Holding forms. Both need a full ten-year employment history with gaps explained and a criminal record check no older than six months — start too early and they lapse before you file.
Initial capital
£20k – £125kSet by the highest-tier service you are authorised for: £125,000 for execution or merchant acquiring, £50,000 for payment initiation only, £20,000 for remittance only. Account information services carry no capital tier of their own.
FCA application fee
Payable on filingA non-refundable application fee is paid via Connect on submission, scaled to the authorisation type. Confirmed against the FCA's current published schedule at scoping rather than quoted from memory here.
Ongoing
AnnualPeriodic fees under FCA fee-block G3 calculated from projected relevant income, a Financial Ombudsman Service levy unless exempt, RegData reporting, ongoing own-funds calculation under Method A, B or C, and a statutory auditor where required.
Our fee
Scoped and fixed once the first call has settled which of the eight Schedule 1 services you actually need, whether Small PI is a better fit, and whether PIS or AIS bring PII into scope. No hourly drift.
Process & timeline
From scoping to authorisation.
3 months statutory · 6–9 months practical
Document preparation & approval
Full build-out of the documentation suite with you, reviewed and signed off before submission — capital tier and service scope drive the shape of the pack from day one.
Review & query management
Submission via Connect and the FCA's review. Well-prepared PI files tend to move faster than EMI files — six to nine months is typical.
Pre-commencement & authorisation
Final conditions — capital injection, safeguarding arrangements and final signed documents — then formal authorisation and go-live under ongoing supervision.
What we prepare
The documentation suite.
54 documents, illustrative — scope narrows or widens with your service class (execution/acquiring vs initiation vs remittance only).
AML/CTF Programme
The firm's approach to customer due diligence, monitoring, screening and suspicious activity reporting.
+ supporting forms and registers
Safeguarding Programme
Under the FCA's CASS 15 safeguarding regime (in force from 7 May 2026) — only applies if you're providing services (a)–(f); payment initiation and account information only firms are exempt, since they never take possession of client funds.
Not required for PIS/AIS-only applicants. CASS 15/10A safeguarding regime is UK-specific. + supporting forms and registers
Governance Framework
The firm's structure, reporting lines, responsibilities and internal control environment.
+ supporting forms and registers
IT & Cybersecurity Programme
The firm's approach to systems, security controls, access management, incident response and mandatory fraud reporting.
+ supporting standards and registers
Business & Operational Documentation
The commercial and operational backbone of the application — how the business runs and is governed.
+ supporting documentation and charts
We build this pack, not a template of it.
Every document is written against your actual services, customers and jurisdictions — which is what makes it survive a regulator’s review and a bank’s due diligence alike.
Who does the work
Senior people, start to finish.
Every application is scoped, built and submitted by senior team members who understand fintech and this specific regime — never delegated to a junior bench.
FAQ
Questions worth asking up front.
Because the FCA ties it to what you actually do: £125k for execution or merchant acquiring, £50k for initiation only, £20k for remittance only. Scoping this correctly at the outset — not over-declaring services you don't need — is one of the fastest ways to reduce your capital burden.
No — this is the clearest structural difference from EMI. A Payment Institution applicant must itself be a UK-incorporated company with its head office here. There's no branch-of-a-foreign-parent route available for PI authorisation.
Small Payment Institution is a lighter-touch registration for firms whose average monthly payment transactions stay under €3 million, assessed on a rolling 12-month basis — no minimum capital, faster to obtain, but a smaller permitted scope. Breach the threshold and you have 30 days to apply for full authorisation or stop the regulated activity, so it suits firms testing a UK-only proposition at genuinely modest volume, not a long-term dodge around full authorisation.
No, for the same reason as EMI — not unless you separately hold other FCA permissions. You still need a formally appointed MLRO under the Money Laundering Regulations 2017, just not as an SM&CR role.
Via Method A, B or C, depending on your business — broadly, a percentage of fixed overheads, a sliding scale against payment volume, or a blend of both. Which method applies, and how it's calculated, is scoped as part of the application itself.
No. The safeguarding section of the FCA's application form applies only to firms providing payment services (a) through (f) — cash placement, withdrawal, execution, credit-funded execution, and issuing/acquiring. If you're PIS or AIS only, you never take possession of client funds in the first place, so that entire requirement — and its documentation pack — doesn't apply to you. You'll still need Professional Indemnity Insurance, though, since that's tied to the service itself, not to fund custody.
More than a background-check box-tick. Anyone with a 10%+ qualifying holding files a Qualifying Holding (Controller) form; each director or manager responsible for the business files a separate PSD Individual form. Both demand a full ten-year employment history with every gap explained and a criminal record check no older than six months. If your firm is separately required to register with HMRC under the Money Laundering Regulations, that registration has to be confirmed before the FCA will authorise you — a step that's easy to miss if you're focused only on the FCA side of the process.
A few that catch firms off guard: periodic FCA fees calculated from your own projected relevant income (fee-block G3), an FOS industry-block levy unless you qualify for an exemption, mandatory regulatory reporting via RegData, and — where UK company law requires one — a named statutory auditor. None of these are large individually, but they're recurring, not one-off, and worth budgeting for alongside the capital figure, not as an afterthought once you're live.
Other regimes
Not the right fit? See the others.
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