Head of International Corporate Law and Fintech Practice
Expert in fintech, crypto, and international corporate law with over 20 years of experience. Specializes in crypto licensing (VASP/CASP), iGaming business support, and international structuring, asset protection, and OSINT analytics for risk assessment and due diligence.
Obtaining a PI Payment Licence
For a FinTech company that wants to independently provide payment services in the European Union, a technology product alone is not sufficient. If the business model involves regulated payment transactions, the company may need the status of a Payment Institution (PI).
A PI licence allows a company to build its own regulated payment business without obtaining a banking licence. At the same time, it is not merely a “formal authorisation”: the regulator assesses the company’s financial capacity, owners and management, AML/KYC, IT infrastructure, risk management system and operating model.
Therefore, proper licensing begins not with completing an application, but with answering the key question: which specific payment services does the company intend to provide?
What is a PI licence?
A Payment Institution is a regulated financial institution authorised to provide payment services defined by applicable legislation.
This status may be relevant for companies that want to independently organise payments, transfers or other financial services for their clients.
A PI model may be used for:
- payment platforms;
- international money transfer services;
- payment solutions for businesses;
- merchant acquiring and related services;
- FinTech platforms;
- embedded finance solutions.
At the same time, the specific range of services that a licensed company may provide is determined by the legislation of the relevant jurisdiction and the terms of the authorisation.
How does a PI differ from a bank and an EMI?
One of the first tasks when structuring a FinTech project is to determine which regulatory status the business actually requires.
| Criterion | Payment Institution | EMI | Bank |
|---|---|---|---|
| Payment services | Yes | Yes | Yes |
| Electronic money | No, not as the primary licensed product | Yes | Yes |
| Bank deposits | No | No | Yes |
| Lending | Not a primary function | Not a primary function | Yes |
| Typical model | Payments and transfers | E-money, wallets + payments | Comprehensive banking services |
Accordingly, a PI may be an optimal option for a company that needs its own payment infrastructure but does not need to establish a full-scale bank or issue electronic money.
Who needs a PI licence?
Not every company that works with payments needs to obtain its own licence.
For example, if a business uses the services of a third-party licensed payment provider and does not independently carry out regulated operations, its own PI status may not be necessary.
However, obtaining a licence should be considered if the company wants to:
- independently provide regulated payment services;
- control its own payment infrastructure;
- work with client funds within the permitted model;
- scale its payment product across the European market;
- reduce dependence on third-party payment providers.
This is why a regulatory perimeter analysis should be conducted before submitting the application to determine which elements of the business model are regulated.
What requirements apply to a Payment Institution?
The regulator assesses the company comprehensively. Having sufficient capital alone does not guarantee that a licence will be granted.
During the application review, attention is generally paid to:
- the corporate structure and UBOs;
- the professional reputation of the owners;
- the experience and competence of management;
- the business plan;
- the financial model;
- the risk management system;
- the AML/KYC framework;
- safeguarding of client funds;
- IT and information security;
- internal controls and governance.
The company must also demonstrate to the regulator that it has sufficient operational capacity to fulfil its obligations to clients.
What documents are required for a PI licence?
The licensing package depends on the country and the specific type of payment services. However, the company must be prepared to provide the regulator with detailed information about its activities.
The following are usually prepared:
- incorporation and corporate documents;
- ownership structure;
- information on UBOs;
- documents relating to directors and key personnel;
- a business plan;
- financial projections;
- a description of payment flows;
- AML/KYC policies;
- a risk management framework;
- procedures for safeguarding client funds;
- IT and cybersecurity documentation;
- a description of internal controls;
- evidence of the source of the owners’ capital.
It is important that all documents are interconnected. For example, the declared transaction volume should correspond to the financial model, IT infrastructure and staffing levels.
How much does it cost to obtain a PI licence?
The project cost depends on the jurisdiction, the complexity of the business model and the number of payment services the company seeks to provide.
In addition to legal support, it is necessary to take into account the costs of:
- regulatory and licensing fees;
- share capital;
- compliance and the AML function;
- key personnel;
- IT infrastructure;
- cybersecurity;
- audit;
- accounting and operational support.
Therefore, a PI licence should be viewed not as a one-off expense for obtaining a document, but as the creation of a fully regulated financial institution.
How to obtain a PI licence in the EU?
The process can broadly be divided into five stages.
- Business model analysis.We determine which services the company plans to provide and whether they are regulated.
- Jurisdiction selection.We compare regulatory requirements, capital, governance, management requirements, compliance and opportunities for further scaling.
- Company structuring.We establish the corporate structure and determine the UBOs, directors, key employees and operating model.
- Application preparation and submission.We prepare the business plan, AML/KYC, risk management, IT documentation and other materials, and then support communication with the regulator.
- Preparation for launch.After authorisation is obtained, we review the readiness of operational processes and help ensure that actual activities comply with the licensed model.
What advantages does a PI licence provide?
- Own payment infrastructure. The company gains greater control over payments, customer experience and operational processes.
- Reduced dependence on third-party providers. The business is not built exclusively around another company’s licence and risk appetite.
- Scalability. A properly structured PI business may take advantage of the opportunities offered by the European payments market.
- Regulatory certainty. The company operates within a clearly defined legal status.
- Attractiveness to partners and investors. Having its own regulatory status may be an important part of a FinTech project’s investment and commercial profile.
PI licence or operating through a payment provider?
For an early-stage startup, obtaining its own licence is not always the best solution. Connecting to an already licensed PI or EMI may allow the company to test its product faster without incurring the costs of building its own regulated structure.
However, the situation may change as the business scales. An own licence becomes more attractive when payment volumes, commission costs, the number of clients or the need to control key financial processes increase significantly.
Therefore, the decision should not be based on the principle that “a licence is always better”, but on a comparison of the economics, risks and strategic objectives of the business.
Is a PI licence suitable for your business?
Before starting the project, it is worth answering several questions:
- Which specific payment services do you plan to provide?
- Will you independently control the movement of client funds?
- Which markets do you plan to operate in?
- Do you need your own payment status for scaling?
- Is the company prepared to maintain an ongoing compliance and risk management framework?
If the business model involves the systematic provision of regulated payment services, obtaining a PI licence may become a foundation for the company’s further development.
Why choose Prikhodko & Partners?
Obtaining a PI licence requires simultaneous work on the corporate structure, FinTech regulation, AML/KYC, risk management, IT and operational processes.
Prikhodko & Partners supports international FinTech projects from the initial analysis of the business model and jurisdiction selection to preparation of licensing documentation and communication with the regulator.
We also help build the related infrastructure: corporate structure, compliance function, banking and payment solutions, as well as ongoing regulatory compliance.
Planning to independently provide payment services and develop your own payment infrastructure in the EU? Contact Prikhodko & Partners for business model analysis, jurisdiction selection and comprehensive support in obtaining a PI licence.
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Is a PI licence required for a payment service?
Not always. If a company operates through a licensed partner and does not independently provide regulated payment services, a separate licence may not be required. This should be assessed based on the actual business model.
Can a PI licence be obtained without a proprietary IT platform?
The technology model may vary, but the regulator must understand exactly how the company will provide its services, control risks, protect information and ensure operational continuity.
Can a company operate in other EU countries after obtaining a PI licence?
European regulation provides mechanisms for the cross-border provision of payment services, but the relevant procedures must be completed and the requirements of specific markets must be taken into account. Therefore, the strategy for future expansion should ideally be incorporated during the preparation of the licence application.
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