PSP Licenses
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Payment Service Provider (PSP) license allows your business to conduct digital payments, process transactions, and operate in different countries. The PSP market’s booming—expected to hit $141 billion by 2034. In Europe alone, more than 1,200 new providers are jumping in.
Getting the right license isn’t just a box to check. It keeps you legal, opens up new markets, and builds trust with your customers. Legarithm walks you through every step, from figuring out what you need all the way to staying compliant after you’re licensed.
What PSP license gives you
PSP License: What & Why
Payment Service Provider (PSP) License is a legal authorization granted by financial regulatory authorities that permits companies to offer payment services. Regulated under frameworks like the EU’s Payment Services Directive 2 (PSD2), the license ensures businesses meet strict standards for security, transparency, capital adequacy, and operational integrity.
Payment Institution (PI) License:
- Authorizes standard payment processing services
- Minimum capital: €125,000 in the EU
- Services: Payment transactions, direct debits, credit transfers, money remittance, payment initiation services
- Suitable for businesses focused on payment processing without issuing electronic money
Electronic Money Institution (EMI) License:
- Includes all PI services plus electronic money issuance
- Minimum capital: €350,000 in the EU
- Additional services: Issue prepaid cards, manage digital wallet balances, store electronic money
- Most comprehensive license for digital payment providers
Small Payment Institution (SPI):
- For businesses processing under €3 million monthly
- Lower capital requirements: €20,000-€50,000
- Limited to operating in country of registration only
- No EU passporting rights
Payment Initiation Service Provider (PISP) License:
- Specialized for initiating payments from customer bank accounts
- Does not involve handling or holding funds
- Lower regulatory requirements
- Part of Open Banking initiative
Application process for PSP license
What Legarithm Does for You
Full-Service License Application
We take care of your entire licensing journey. That means everything—from picking the right jurisdiction and shaping your business plan, to putting together your application and talking to regulators. Our team gets all your documents in order, handles every back-and-forth with authorities, and makes sure your application checks every box for approval.
Compliance Frameworks
We build compliance systems that actually fit your business. That includes AML/KYC policies that meet global standards like FATF and AMLD6, transaction monitoring, risk management, GDPR-compliant data protection, and reporting tools regulators want to see.
Legal Entity Setup & Governance
Need a company set up in the best spot? We handle it. From forming your company and sorting out shareholder agreements, to appointing directors and making sure all the governance pieces fit together—our job is to make sure your business structure lines up perfectly with licensing rules.
EU Passporting & Cross-Border
If you have an EU license, we’ll help you expand across the EEA. We manage the passporting process, notify host countries, make sure you stay compliant locally, and set up your operations in each new market so you can grow without limits.
Ongoing Support
Our help doesn’t stop once you get your license. We stay in your corner with regulatory reporting, audit prep, license updates as your business grows, keeping you up to date with new rules, and representing you with regulators—so you stay compliant for the long run.
Banking & Payment Solutions
We help you connect with the banks and payment partners you need—acquiring banks, processors, financial institutions. We also guide you through opening IBAN accounts, setting up correspondent banking, integrating payment gateways, and managing multi-currency accounts.
Frequently Asked Questions
Still have questions?
How long does it take to obtain a PSP license?
The typical timeline is 6-12 months from application submission to license approval, with an additional 2-3 months for preparation. Complex applications may extend to 12-18 months. Working with experienced legal advisors like Legarithm helps streamline the process and avoid common delays.
What is the difference between PI and EMI licenses?
Payment Institution (PI) license authorizes standard payment services like payment processing, money transfers, and direct debits. An Electronic Money Institution (EMI) license includes all PI services plus the ability to issue electronic money such as prepaid cards and digital wallets. EMI requires higher capital (€350,000 vs €125,000 in EU) but offers comprehensive capabilities for digital payment platforms.
Can I operate in multiple countries with one license?
Yes. An EU-based PSP license grants “passporting” rights to operate throughout the European Economic Area (27 EU countries plus Iceland, Liechtenstein, and Norway) without separate licenses. However, expansion to non-EEA jurisdictions like the US, UAE, or Asia requires separate licensing in those territories.
What are the ongoing compliance obligations?
Licensed PSPs must maintain regular regulatory reporting (monthly/quarterly/annual), conduct annual financial and PCI DSS audits, maintain minimum capital requirements, perform continuous AML/KYC monitoring and transaction surveillance, update policies in line with regulatory changes, provide staff training, and notify regulators of material changes. Legarithm provides comprehensive post-license support for ongoing compliance.
Which jurisdiction is best for a PSP license?
The optimal jurisdiction depends on your target markets and business model. For EU market access, popular options include Lithuania (efficient, fintech-friendly), Malta (strong reputation), Cyprus (competitive costs), and Liechtenstein (premium jurisdiction). UK provides British market access but no EU passporting post-Brexit. Consider target markets, capital availability, operational costs, and banking accessibility. Legarithm provides detailed jurisdiction analysis tailored to your needs.
We Are Always Available
Our team ensures your business setup is smooth, efficient, and compliant with local laws. Contact us today to discuss your project.
Cyprus, Limassol
Arch. Makarios Av. III, No. 1-7, Mitsis Building 3, 3rd floor, Office 302, 1065 Nicosia
Estonia, Tallinn
Tallinn, Harju maakond, Lasnamäe linnaosa, Ruunaoja tn 3, 11415
UAE, Dubai
Building A1, Dubai Digital Park, Dubai Silicon Oasis, Dubai, UAE
Ukraine, Kyiv
Kyiv, Mykhailo Boychuk Street, Office 3011, 01103, Ukraine
United States, New York
228 Park Ave S, New York City, New York, 10003, USA
Get in Touch
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