Do payments apps and payment processors need FCA authorisation?

Providing payment services by way of business under the Payment Services Regulations 2017 requires authorisation or registration as a payment institution, unless you are a registered agent or an exclusion applies. Whether your app is within scope depends on whether you handle payment funds.

A small payment institution is a registered, lighter-touch category for firms whose payment volumes stay under the threshold and that do not provide payment initiation or account information services.

Providing payment services by way of business needs authorisation or registration as a payment institution unless you are an agent of one or an exclusion applies. It can change depending on the answers to questions such as: Do you receive, hold or move customers’ money yourself, rather than only providing software to a regulated payment firm? Do you issue cards or payment instruments, or acquire card payments for merchants? Will your average monthly payment volume stay under EUR 3m, and do you only offer payments (not payment initiation or account information)? Will you act as an agent of an authorised payment institution, which registers you with the FCA?

Start with: Payment services and exclusions; Perimeter guidance on the PSRs; FCA: payment institution applicants; Safeguarding of relevant funds. This is an initial view from published FCA material, not an FCA determination.

Map the flow of funds: who holds money, when, and in which account. Check each service against the payment services list and the exclusions. Decide between authorisation, small payment institution registration and agent status. Design safeguarding, incident reporting and financial crime controls.