Becoming a small payment institution
The Payment Services Regulations 2012, which amend the Payment Services Regulations 2009 (PSRs), came into effect on 1 October 2012. The amendments change the registration requirements for applicants seeking to become small payment institutions (small PIs) and those that are already small PIs.
To qualify for registration as a small PI, an applicant must meet the following conditions:
- the applicant must satisfy us that its directors and/or any persons responsible for the management of the small PI, and where relevant the persons responsible for the management of its payment services, are of good repute and possess appropriate knowledge and experience to provide payment services;
- its projected average monthly payment transactions must not exceed €3million;
- none of the individuals responsible for managing the business has been convicted of offences relating to money laundering or terrorist financing or other financial crimes;
- its head office and, where applicable, its registered office (or place of residence for natural persons) must be in the UK;
- it must comply with the registration requirements of the Money Laundering Regulations 2007, where those requirements apply to it;
- where the applicant is a partnership, an unincorporated association, or a body corporate, the applicant must satisfy us that any persons having a qualifying holding in it are fit and proper persons having regard to the need to ensure the sound and prudent conduct of the affairs of a small PI; &
- where the applicant is a body corporate that has close links with another person (‘CL’) the applicant must satisfy us that those links are not likely to prevent our effective supervision of the applicant. If it appears to us that the CL is subject to the laws, regulations or administrative provisions of a territory outside of the EEA, the applicant must satisfy us that those foreign laws/provisions would not prevent our effective supervision of the applicant.
If you meet these conditions and wants to apply for registration as a small PI, please fill out the Registration Application for a small payment institution form.
You must complete a PSD Individual Form for each individual responsible for payment services; please refer to the accompanying notes, when completing the form.
We will aim to acknowledge a small PI application within seven days of receiving it, and the case officer responsible for assessing it will contact you shortly after that. If you have any queries about your application, please direct them to your case officer in the first instance.
Additional forms that a Small PI may need to submit
What information must I provide about the people/firms with a stake in my business?
You must complete a form for each person/firm who holds a ‘qualifying holding’ in your business from the following list (See Chapter 3 of the Approach Document for a definition of ‘qualifying holdings’):
What is a qualifying holding?
A ‘qualifying holding’ is defined in the PSRs by reference to Article 4(11) of the Banking Consolidation Directive (BCD). The definition in the BCD is a ‘direct or indirect holding in an undertaking which represents 10% or more of the capital or of the voting rights or which makes it possible to exercise a significant influence over the management of that undertaking’.
Broadly speaking a ‘qualifying holding’ is an individual or firm that has a stake or:
- holds 10% or more of the shares in the applicant firm (including via a parent firm);
- is able to exercise significant influence over the management of the applicant firm through a controlling interest in the applicant firm or a parent;
- is entitled to control or exercise control of 10% or more of the voting power in the applicant firm (including via a parent firm); or
- is able to exercise significant influence over the management of the applicant firm through their voting power in it or a parent.
- Limited Liability Partnership (LLP) applicants should note that some (or sometimes all) individual members may be controllers of the LLP. Usually this will depend on the number of members and the terms of the membership agreement, especially regarding voting power or significant influence. See 3.107 in the Approach Document.
How do I register an agent?
An ‘Add a PSD agent’ form should be submitted for any payment services agent(s) who will provide payment services on your behalf. Please note that you will be responsible for an agent in relation to those services.
To streamline this process, we do not intend to acknowledge receipt of agent applications, but will write to notify you when we make our decision. Please email any queries on submitted applications, to our dedicated email address: PaymentServicesTeam@fca.org.uk
Please note as a small PI you would not be able to passport any payment services to other EEA States.