PSP License Services for Payment Businesses
LegalBison sets up licensed payment companies end to end: company formation, capital, compliance, and the license application itself, run by one project team. Most clients arrive asking for a PSP license. In most major markets, no regulator issues an authorization under that name. The term is industry shorthand for the permission your model actually needs.
What you need follows from two choices: what your product does, and where you operate. A remitter, a card gateway, and a wallet provider take different routes even in the same market. We name the right instrument for yours: a payment institution or EMI license in Europe, FCA authorization in the UK, RPAA registration in Canada, or a dedicated PSP class in Ghana and Kenya. Then we build and file the whole application through one point of contact.
PSP Licensing with LegalBison
Schedule a free consultation with LegalBison. We will name the right license, or tell you when you do not need one.
Aaron Glauberman specializes in crypto and FinTech licensing, MiCA and PSD2 frameworks, and cross-border corporate structuring.
+44 20 4577 0974
Our team of experienced professionals to assist you with any question and project pertaining to FinTech projects.
+44 20 4577 0974
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Initial scoping & qualification of business model
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Jurisdiction comparison & instrument selection advice
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High-level capital & timeline estimation
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No financial commitment required
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Everything on free consultation, plus:
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End-to-end licensing execution & regulatory filing
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Company formation, capital structuring & local substance setup
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Custom compliance drafting, AML framework & safeguarding setup
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Direct regulatory communication & post-licensing support
What is a PSP license
PSP stands for payment service provider. In regulation, the term covers any company that provides payment services: executing transfers, money remittance, merchant acquiring, issuing payment instruments, and similar activities. Banks, e-money institutions, and payment institutions are all PSPs under European law.
Founders rarely apply for anything named PSP. They apply for the specific authorization their activity requires. In Europe, that means a payment institution (PI) or electronic money institution (EMI) license. Elsewhere the label changes: the UK authorizes firms under its own rules, Canada registers them, and some African regulators do issue license categories literally named PSP. Processors, gateways, and platforms use the PSP label commercially even when regulation calls them something else.
So treat a PSP license as an outcome, not a document. Pick the instrument by business model and target market.
You need a payments authorization when your business holds client money or performs regulated payment services. Four models cover most cases:
- Card gateways and acquirers. Accepting card payments for merchants is a regulated service. A gateway that never holds merchant funds can often run as a technical provider or an agent of a licensed acquirer. Once you settle funds yourself, you need your own license.
- Money remitters. Sending money across corridors is money remittance. In Europe it carries the lowest capital tier, EUR 20,000, though the compliance workload stays heavy. US money transmission runs on separate state-level licenses. Multi-corridor plans pair well with our cross-border payments service.
- Wallets and stored balances. A product that holds customer balances issues electronic money. That points to the EMI route, not a plain PI license.
- Crypto fiat rails. Exchanges and on-ramps that touch client fiat usually pair a payments license with their crypto permissions.
PSP, PI, EMI, or processor?
| Payment processor | Payment institution | EMI | |
|---|---|---|---|
| Issue e-money and hold wallet balances | No | No | Yes |
| Execute payments, remittance, acquiring | Technology or agent only | Yes | Yes |
| Hold client funds | No, never holds funds | Yes, safeguarded | Yes, safeguarded |
| EU initial capital | None | EUR 20,000 to EUR 125,000 by service | EUR 350,000 |
| Passport across the EEA | No | Yes | Yes |
The fund-holding row settles a common confusion. Licensed payment and e-money institutions do hold client money: PSD2 requires segregated accounts at a credit institution or an insurance arrangement (Article 10). Unlicensed processors work the other way. They pass instructions between banks without taking possession of the funds, which keeps them outside the licensing perimeter in most markets. The moment such a processor takes possession, the exemption ends.
Capital comes from PSD2 Article 7: EUR 125,000 for execution, acquiring, and payment-instrument issuance services, EUR 50,000 where the only service is payment initiation, EUR 20,000 for pure remittance. An EMI needs EUR 350,000 under the E-Money Directive. Ongoing own funds then scale with volumes.
If your product stores customer balances, the EMI route is usually the fit. Our EMI license page covers the full application picture, and our EMI explainer walks through the basics.
- Where payment service providers get licensed
- Requirements regulators check
- Timeline and cost drivers
- Compliance duties after licensing
Five markets show how much the instrument varies:
| Market | Regulator | The actual authorization | Notes |
| EU / EEA | National regulators, for example the Bank of Lithuania | Payment institution or EMI license under PSD2 and the E-Money Directive | One license covers all 30 EEA states through passporting. Lithuania details |
| United Kingdom | FCA | Authorized payment institution or authorized e-money institution under the Payment Services Regulations 2017 and Electronic Money Regulations 2011 | Separate regime since Brexit; no EEA passport. Smaller-firm registrations exist. FCA applications |
| Canada | Bank of Canada | Registration under the Retail Payment Activities Act (RPAA) | A registration, not a license; the Bank states it does not endorse registered PSPs. Retail payments supervision |
| Ghana | Bank of Ghana | PSP and e-money license classes under the Payment Systems and Services Act, 2019 (Act 987) | Classes and conditions are set by the Bank of Ghana. Act 987 |
| Kenya | Central Bank of Kenya | PSP authorization under the National Payment System Act, 2011 and the 2014 Regulations | Categories include electronic retail transfers and e-money issuance. CBK national payments |
Choose the market from customers, corridors, and banking partners. An EU license wins when you serve the single market. Canada suits North American settlement flows. Ghana and Kenya fit corridor-heavy remittance businesses with local operations. Banking access shapes the choice as much as the license does. We compare the options against your plan before recommending one.
Paperwork differs, but the checklist rhymes almost everywhere:
- Initial capital. Paid in and evidenced before filing. Europe tiers it at EUR 20,000 to EUR 125,000 for PIs and EUR 350,000 for EMIs; other markets set their own minimums.
- Ongoing own funds. Capital is not one-off. EU institutions recalculate own funds as volumes grow; an EMI holds at least 2% of average outstanding e-money.
- Local substance. Most markets expect a registered office and management that actually sits in the licensing country. Depth varies by jurisdiction.
- Fit and proper people. Directors, senior managers, and qualifying shareholders pass background checks on integrity and experience.
- An AML/CFT program. Written policies, customer screening, transaction monitoring, reporting lines, and a named compliance officer or MLRO.
- A safeguarding arrangement. Client funds sit in segregated accounts or carry insurance, operational before launch, not promised after it. Canadian registrants face the same logic: risk-management and safeguarding frameworks became mandatory on September 8, 2025.
- A program of operations. Business plan, financial forecasts, governance map, and a wind-down plan. The FCA expects tailored documents and rejects generic templates.
Expect the regulator to test every document against your actual payment flows.
Cost and time follow four drivers:
- Capital. The largest item by far: EUR 20,000 to EUR 350,000 in Europe depending on route. It stays yours, held in the company; it is not a fee.
- Regulator fees. They vary by market and firm size. The FCA application fee is non-refundable. Canada charges a CAD 2,500 application fee. EU state levies stay modest.
- Preparation. Entity setup, substance, and the compliance build usually take several months. Your readiness moves this number more than anything else.
- Assessment. European law gives regulators a three-month decision window for complete files, with extensions in practice. The FCA allocates a case officer within 20 working days and decides after review. The decision itself belongs to the regulator. Preparation is the part you control.
The license starts the obligations; it does not end them:
- Safeguarding upkeep. Reconcile client funds daily and audit the arrangement as required.
- AML/CFT operations. Run screening and monitoring continuously, report suspicious activity, and train staff.
- Regulatory reporting. File periodic returns. Canadian registrants submit an annual report to the Bank of Canada.
- Change approvals. New shareholders, new services, and new branches usually need regulatory approval first. Change-in-control filings are a standard trigger.
- Consumer rules. Complaints handling, disclosures, and conduct requirements apply once you serve users. The UK adds its Consumer Duty on top.
The step by step application process
Scope the authorization. Map the model to a license type and market. If an agent or sponsorship structure removes the need for a license, we say so at this stage.
Form the company and build substance. Incorporate locally, appoint directors, and open operational accounts.
Fund the capital position. Pay up the initial capital and plan the ongoing own-funds calculation.
Build the compliance framework. Draft the AML program, safeguarding mechanics, governance, and operations manual around your real flows. For most teams, this is the longest stage.
File and respond. Submit the dossier, answer regulator questions, and complete fit-and-proper reviews for the people in charge.
Go live. Confirm register listings, connect banking and scheme partners, and switch on monitoring before the first transaction.
How LegalBison runs a PSP licensing project
One coordinated team handles the whole file: corporate, legal, compliance, and banking, led by a single project lead.
- Scoping is jurisdiction-neutral. The recommendation follows your model and market, not our office locations.
- Formation, capital, and substance build in parallel with the compliance program.
- Documentation is drafted around your actual payment flows, not template language.
- We talk to the regulator directly until the decision lands.
- Pricing is agreed before engagement, with support continuing after authorization.
Formation, licensing, and administration run under one roof, so clients hold one contract for the whole project.
Not sure which authorization fits your model? Schedule a free consultation with LegalBison. We will name the right license, or tell you when you do not need one.
- Why LegalBison
One coordinated team handles the whole file: corporate, legal, compliance, and banking, led by a single project lead.
- Scoping is jurisdiction-neutral. The recommendation follows your model and market, not our office locations.
- Formation, capital, and substance build in parallel with the compliance program.
- Documentation is drafted around your actual payment flows, not template language.
- We talk to the regulator directly until the decision lands.
- Pricing is agreed before engagement, with support continuing after authorization.
Formation, licensing, and administration run under one roof, so clients hold one contract for the whole project.
Not sure which authorization fits your model? Schedule a free consultation with LegalBison. We will name the right license, or tell you when you do not need one.
STORIES OF OUR CLIENTS
As a result of the fruitful cooperation with LegalBison, Yellow Card obtained a VASP registration, fast and without any legal complications.
I highly recommend Legal Bison to any entrepreneur or business seeking top-notch services for their company formation. Their commitment to excellence and customer satisfaction is truly commendable.
Best company for Crypto Licenses! Kudos to the team for making the incorporation of our company really smooth
LegalBison excels at adapting to challenges and demonstrates a perfect understanding of our business needs.
Quick set-up and straightforward process. It was a smooth process, we are happy to have chosen LegalBison as our Partner for incorporations, globally.
The team of LegalBison was very helpful and fast in supporting my company’s structural set up. They are undoubtedly top-level experts when it comes to licensing and registrations in the crypto and web3 industry. Highly recommend!
We are happy to cooperate with LegalBison for more than 2 years and during this time they definitely secured a reputation of very professional and reliable partner. Great knowledge, competence and good attitude. Keep up the good work!
FAQ about Payment Service Provider License
There is no single document with this name. A PSP license is shorthand for the authorization your market actually requires. In Europe that is a payment institution or EMI license. The UK uses FCA authorization, Canada uses RPAA registration, and markets like Ghana and Kenya issue dedicated PSP classes. Name your model and market, and the exact instrument becomes clear.
In banking vocabulary, a payment service provider is any firm that provides payment services. Banks themselves are PSPs, alongside payment institutions and e-money institutions. When a bank or partner asks for your PSP license, they mean proof that you are authorized to hold and move client funds. Answer with your exact category, for example licensed PI or licensed EMI, plus your register entry.
Three components add up. Initial capital comes first: EUR 20,000 to EUR 125,000 for a European PI, EUR 350,000 for an EMI, local minimums elsewhere. Regulator fees come second; the FCA application fee is non-refundable, and Canada charges CAD 2,500 to apply. Professional fees come third and depend on scope, jurisdiction, and readiness. LegalBison confirms the full numbers before you commit.
Yes, on the fiat side. Exchanges, wallets, and on-ramps that handle client fiat commonly add a payments license to their stack. Crypto-asset services themselves sit under separate rules: in the EU, MiCA governs them, and our MiCA license guide maps the regime. One crossover matters for stablecoin projects: issuing an e-money token requires EMI or credit institution status under MiCA.
The fastest route to a realistic plan is one conversation: which authorization, which market, what it costs, who does the work. Contact LegalBison to schedule a free consultation. The regulator decides the outcome. Preparation decides how long you wait.
Start your licensed banking company today
Inquire about more information on PSP license and receive the assistance of a legal service professional to help you design your banking project.
Aaron Glauberman specializes in crypto and FinTech licensing, MiCA and PSD2 frameworks, and cross-border corporate structuring.
Our team of experienced professionals to assist you with any question and project pertaining to FinTech projects.
