payment services consultants and e-money

The Payment Service Directive 2 (PSD2 ) aims to promote innovation within the payments sector. Furthermore, it aims to improve protection for consumers and make payments both safer and more secure. This means before you can operate as a payments services operator in the UK, you will need to obtain authorisation from the Financial Conduct Authority (FCA).

If you wish to become authorised by the FCA or to vary your permissions to include payment services, it can be a time-consuming and daunting process. This applies if you provide payment services (as defined in the Payment Service Regulations 2017) as a regular occupation or business activity in the UK.

There are different types of registrations or authorisations routes you can take if you wish to be a regulated payment services provider. There are 2 main types of financial institutions – an Authorised Electronic Money Institution (EMI) and an Authorised Payment Institution (PI). For each type, there is a “small license” – Small Electronic Money Institution (EMI) license and Small Payment Institution (PI) license.

This means you can either become an authorised PI, a small PI or a registered account information service provider (RAISP). This may encompass a route of:

request to be authorised by the FCA as an authorised payment institution;
request to be registered as a small payment institution;
request to be registered as an account information services provider, or
request to be registered as an agent of an authorised payment institution or a small payment institution.
Additionally, you will require specialist banking facilities, such as client safeguarding accounts, systems and software to manage your business and access to payment systems, such as SEPA and SWIFT.

Key considerations

The FCA is keen for any payment entrants to ensure they can address their compliance issues, safeguard customer funds, and robust AML frameworks amongst others before authorisation can be granted.

It is an FCA requirement that firms seeking authorisation to operate as a Payment Service Provider (PSP) must be able to show evidence of robust IT security policies and procedures as well as a detailed risk assessment. It is also critical to show that all FCA compliance requirements have been met.

Key considerations you must consider for your firm include:

The competencies (and attitudes) of the senior team
The ability to demonstrate that ‘mind and management’ within the UK regulated entity
Clear evidence of appropriate consideration of customer outcomes
A business model, and operational control framework that is resilient

How can MEMA help you?

Our payment services consultants team has the experience and expertise to help you. Our offering includes a regulatory business plan, a suite of compliance policies and procedures, and an IT security risk assessment. We can provide template documents and work with you to tailor these to your specific circumstances. We can also carry out a gap analysis on your current policies and procedures – and help you address any action points identified.

We will also assist you in ensuring that you are complying with your anti-money-laundering requirements. In particular, we assist with risk assessments and compliance regimes including Knowing Your Client (KYC) .

Ongoing FCA Compliance

As an FCA authorised person or firm, you might need help to ensure you comply with the FCA’s rules.

We provide our clients with support they need to maintain compliance and avoid breaching the rules. Our bespoke service is individually tailored to each of our client’s requirements and objectives to help them meet in the best way possible.

Whether you need documentation to help you remain compliant, want ongoing advice or support, impartial monitoring of your activities or anything else, MEMA may be able to help.

Why Choose MEMA?

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MEMA has been supporting firms through the FCA compliance process since 2019. In that time, we have helped hundreds of businesses to successfully gain and retain FCA authorisation.

We have a unique blend of experience from ex-regulators, big 4 consultants and fin/regtech specialisation. Our team is highly experienced and expertly skilled. We specialise in providing our clients with solutions to often complex regulatory requirements and compliance needs.

Our unique industry insight and comfort with compliance enables our team to support you to the fullest extent possible, helping to develop your business model and compliance.