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Payment Services

Payment Services
FCA Authorisation

Specialist regulatory support for payment institutions, e-money issuers, money remittance providers, and payment service providers under PSRs 2017.

80+
Firms Authorised
97%
Success Rate
16 wks
Avg Timeline

Payment Services Regulatory Landscape

The payment services sector encompasses money remittance, payment initiation services (PIS), account information services (AIS), e-money issuance, and merchant acquiring under the Payment Services Regulations 2017.

FCA regulation has intensified following PSD2 implementation, with enhanced focus on safeguarding client funds, strong customer authentication (SCA), operational resilience, and APP fraud prevention.

Successfully obtaining authorisation requires demonstrating robust systems and controls, adequate safeguarding arrangements, comprehensive AML procedures, and credible business models that satisfy the FCA's rigorous standards.

Typical Services

  • Money remittance and cross-border transfers
  • E-money issuance and prepaid cards
  • Payment initiation services (Open Banking)
  • Account information services (AIS)
  • Merchant acquiring and card payment processing
  • £Currency exchange and FX services

Required FCA Permissions & Authorisations

Payment service providers require specific permissions under PSRs 2017 and EMRs 2011.

Money Remittance

Executing payment transactions where funds are received from a payer for onward transmission to a payee.

Key Requirements
  • Safeguarding arrangements
  • AML/CTF controls
  • Transaction monitoring
  • Sanctions screening

E-Money Issuance

Issuing electronic money (prepaid cards, digital wallets) that can be used for payments.

Key Requirements
  • Initial capital: £350,000
  • Safeguarding of e-money
  • Redemption procedures
  • Float management

Payment Initiation Services (PIS)

Initiating payments from customer bank accounts via Open Banking APIs.

Key Requirements
  • PI insurance: €1m
  • Secure API integration
  • Strong customer authentication
  • Liability framework

Account Information Services (AIS)

Accessing and aggregating customer account data from multiple banks.

Key Requirements
  • Data protection policies
  • Customer consent management
  • API security
  • Third-party oversight

Acquiring of Payment Transactions

Merchant acquiring and card payment acceptance services.

Key Requirements
  • PCI DSS compliance
  • Merchant due diligence
  • Chargeback management
  • Settlement procedures

Execution of Payment Transactions

Processing payment orders including direct debits and credit transfers.

Key Requirements
  • Payment system access
  • Transaction reporting
  • Reconciliation systems
  • Operational resilience

Key Regulatory Requirements

Payment institutions must demonstrate compliance with comprehensive PSRs 2017 frameworks.

Safeguarding Client Funds

Segregated safeguarding accounts with authorized credit institutions
Daily reconciliation of relevant funds
Safeguarding policy and procedures documentation
Alternative: insurance or guarantee arrangements
Audit trail for safeguarding calculations
Monthly safeguarding reporting to FCA

Anti-Money Laundering & Sanctions

MLRO appointment and governance structure
Customer due diligence (CDD) and enhanced due diligence (EDD)
Transaction monitoring and suspicious activity reporting
Real-time sanctions screening (OFSI, UN, EU lists)
PEP screening and adverse media checks
Annual AML/CTF risk assessment

Operational & IT Resilience

Incident management and business continuity plans
Disaster recovery and backup systems
Outsourcing and third-party risk management
Cyber security framework and penetration testing
API security and authentication protocols
Payment system resilience requirements

Strong Customer Authentication (SCA)

Two-factor authentication for payment initiation
Dynamic linking of transaction amounts
SCA exemption management (low-value, trusted beneficiaries)
Authentication method security standards
Fraud rate monitoring for exemptions
Customer authentication data protection

APP Fraud & Consumer Protection

Authorised Push Payment (APP) fraud prevention controls
Confirmation of Payee (CoP) implementation
Customer warnings and friction for high-risk payments
Effective refund policies and dispute resolution
Participation in voluntary APP scam reimbursement code
Fraud analytics and intelligence sharing

Financial Resources & Capital

Initial capital: £20k - £350k depending on permissions
Own funds calculation (Tier 1 capital)
Professional indemnity insurance (PIS/AIS: minimum €1m)
Quarterly capital adequacy returns (CRR form)
Financial projections for 3 years
Wind-down plan and contingency capital

Ready to Get Authorised?

Speak with our payment services regulatory specialists to discuss your FCA authorisation.

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