Payment License
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Almost every business has to deal with things like money transfers, payment processing, e-money, or digital wallets. For that, you need a payment license. There’s just no way around it. Whether you’re launching a new fintech app, setting up a crypto exchange, or building a payment platform, the rules apply, but they’re also different everywhere you go. In the EU, you’ve got PSD2 and EMD2. In the US, every state has its own Money Transmitter License.
Navigating all of this can be perplexing. Legarithm steps in here, handling the whole process—helping you get the licenses you need, and keeping you compliant, wherever you are keen to do business.
Who needs a payment license
Check if your business is obliged to have a payment license.
Fintech Startups
Digital banking platforms, neobanks, challenger banks, and innovative financial service providers require payment licenses to legally operate. Essential for securing investor funding and establishing market credibility from launch.
Payment Processors
Businesses facilitating payment transactions between merchants and customers including payment service providers, payment aggregators, merchant acquirers, and payment facilitators operating card processing or alternative payment methods.
Digital Wallet Providers
Companies offering e-wallet services, mobile wallets, stored-value accounts, and peer-to-peer payment platforms enabling users to store funds electronically and make digital payments.
Money Transfer Services
Remittance providers, international money transfer operators, and cross-border payment platforms facilitating domestic and international fund transfers. Includes traditional money transmitters and modern digital remittance services.
Cryptocurrency Platforms
Crypto exchanges enabling buying/selling/trading of digital assets, custodial wallet services holding private keys, crypto payment processors, stablecoin issuers, DeFi platforms offering lending/borrowing, and any business transmitting or storing cryptocurrency on behalf of others.
E-Commerce Platforms
Large-scale marketplaces and e-commerce platforms processing payments between buyers and sellers, holding funds in escrow, or providing integrated payment services within their platforms.
Prepaid Card Issuers
Companies issuing prepaid payment cards, gift cards with stored value, travel cards, or corporate expense cards requiring electronic money authorization.
Payment Gateway Operators
Technical infrastructure providers operating gateway services connecting merchants to payment processors, card networks, and acquiring banks. Facilitates online payment acceptance and transaction routing.
Crowdfunding & Peer-to-Peer Platforms
Platforms facilitating investment crowdfunding, peer-to-peer lending, or invoice financing where funds are transferred between multiple parties through the platform.
Gaming and Gambling Operators
Online gaming platforms, gambling sites, and esports platforms processing player deposits, withdrawals, and prize payments require payment licenses alongside gambling authorizations.
Merchant Service Providers
Businesses providing point-of-sale systems, payment terminals, and merchant services enabling retailers to accept card and digital payments from customers.
Forex and Trading Platforms
Foreign exchange brokers and trading platforms handling customer deposits, withdrawals, and payment processing related to trading activities.
Our payment license services
License Type and Jurisdiction Consultation
We analyze your business model, target markets, and service offerings to determine optimal license type and jurisdiction. We provide detaia led comparison of regulatory requirements, timelines, costs, and strategic advantages across relevant jurisdictions, ensuring alignment with business objectives and growth plans.
Application Preparation and Submission
Complete preparation of licensing applications including detailed business plans with financial projections, compliance policies and procedures, risk management frameworks, corporate governance documentation, and all required supporting materials. We handle submission to regulatory authorities and manage all application-stage communications.
Compliance Framework
Design and implementation of comprehensive compliance systems including FATF-compliant AML/KYC procedures, transaction monitoring protocols, risk assessment methodologies, customer due diligence frameworks, data protection policies (GDPR/privacy compliance), responsible business practices, and regulatory reporting systems meeting authority expectations.
Corporate Structuring and Entity Formation
Establishment of appropriate legal entities in chosen jurisdictions including company incorporation, shareholder structuring, director appointments, registered agent services, and corporate governance framework ensuring compliance with licensing requirements and optimal operational structure.
Banking and PSP Facilitation
Assistance establishing critical financial infrastructure including acquiring bank selection and introductions, payment processor partnerships, IBAN and business account opening, correspondent banking arrangements, card network relationships, and payment gateway integrations.
Ongoing Compliance and Regulatory Support
Continuous post-license support including regular regulatory reporting assistance, annual audit coordination, license renewal management, material change notifications, policy updates aligned with regulatory changes, staff training on compliance matters, and incident management.
Jurisdictions Legarithm works with
This is not the whole list; you can specify in Telegram or WhatsApp via our contact forms for the one you need.
European Union (Lithuania, Malta, Cyprus, Estonia)
Regulatory Framework: Payment Services Directive 2 (PSD2) and Electronic Money Directive 2 (EMD2)
Key Advantage: EU passporting rights enable operations across all 27 member states plus EEA countries with single license
Popular Jurisdictions: Lithuania (fast processing, fintech-friendly, 3-6 months), Malta (premium reputation, strong banking access), Cyprus (competitive costs, English-speaking), Estonia (digital infrastructure, e-Residency program)
Capital Requirements: €125,000 for PI, €350,000 for EMI
United Kingdom
Regulatory Framework: Payment Services Regulations 2017, Electronic Money Regulations 2011, supervised by Financial Conduct Authority (FCA)
Key Advantage: Access to London financial hub, strong regulatory reputation, comprehensive fintech ecosystem
Note: Post-Brexit, UK licenses no longer provide EU passporting. Separate EU authorization required for European operations
Capital Requirements: €125,000 for PI, €350,000 for EMI
Timeline: 6-12 months
United States
Regulatory Framework: State-level Money Transmitter Licenses, federal MSB registration with FinCEN
Key Advantage: Access to the world’s largest payment market, essential for US operations
Challenge: No federal passporting—separate license required in each state (49 states + DC require MTL, Montana exempt)
Capital Requirements: Varies by state ($100,000-$1,000,000 surety bonds/net worth)
Popular Entry States: New York (BitLicense for crypto), California, Texas, Florida
Timeline: 6-18 months per state
United Arab Emirates
Regulatory Framework: Central Bank of UAE supervision
Key Advantage: Gateway to Middle East markets, favorable tax environment, growing fintech hub
Capital Requirements: AED 2 million for EMIs
Timeline: 6-9 months
Singapore
Regulatory Framework: Payment Services Act regulated by Monetary Authority of Singapore (MAS)
Key Advantage: Asia-Pacific gateway, highly regarded regulatory framework, sophisticated financial center
License Types: Money-Changing Service, Domestic Money Transfer, Cross-Border Money Transfer, Merchant Acquisition, E-Money Issuance, Digital Payment Token Service
Capital Requirements: Varies by license type (SGD 100,000-250,000)
Timeline: 6-9 months
Canada
Regulatory Framework: Money Service Business (MSB) registration with FINTRAC
Key Advantage: North American market access, crypto-friendly environment, straightforward federal registration
Scope: Currency exchange, money transfers, virtual currency operations
Requirements: AML/CFT compliance under PCMLTFA
Timeline: 3-6 months
Switzerland
Regulatory Framework: FINMA supervision
Key Advantage: Premium jurisdiction, cryptocurrency-friendly “Crypto Valley,” strong privacy protections
Capital Requirements: CHF 300,000+ depending on license type
Note: Extremely rigorous compliance requirements but unparalleled global reputation
Frequently Asked Questions
Still have questions?
What's the difference between PSP and EMI licenses?
Payment Institution (PSP/PI) licenses authorize payment services including transfers, processing, and transaction facilitation without issuing electronic money. Electronic Money Institution (EMI) licenses include all PI services plus authority to issue e-money, prepaid cards, and digital wallets with IBAN provision. EMIs require higher capital (€350,000 vs €125,000) but offer comprehensive capabilities.
Can I operate internationally with one payment license?
EU licenses provide passporting rights enabling operations across all EEA countries (30+ jurisdictions) with single authorization. However, non-EEA markets require separate licensing. US requires state-by-state licensing with no federal passporting. International operations typically need multi-jurisdictional licensing strategy managed through coordinated approach.
What do I need to do to keep my payment license compliant?
Licensed entities must maintain continuous compliance including monthly/quarterly/annual regulatory reporting, annual financial and security audits, capital adequacy monitoring, AML/KYC transaction surveillance, policy updates aligned with regulatory changes, staff training programs, and material change notifications to authorities. Ongoing costs typically €200,000-€500,000 annually.
Do I need a payment license if I only process payments for my own business?
No. If you’re simply accepting payments for your own goods or services (e.g., running an online store), you don’t need a payment license. Licenses are required when you facilitate payments between third parties, hold customer funds, or provide payment services to other businesses or consumers.
What happens if I operate without a required payment license?
Operating without proper licensing can result in severe penalties including business shutdown, fines up to €5 million or 10% of revenue, criminal prosecution of directors, asset seizure, and permanent industry bans. Banks and payment processors will refuse to work with unlicensed entities, making operations impossible.
How do I know which type of payment license my business needs?
The required license depends on your specific activities: if you issue electronic money or prepaid cards, you need an EMI license; if you only process payments without holding funds, a PSP/PI license suffices; if operating in the US, you need state-by-state MTLs. A consultation with licensing experts like Legarithm can assess your business model and determine exact requirements.
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
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