The Authorised Payment Institution (API) licence stands as a gateway to a diverse range of financial services, empowering its holders to provide a spectrum of essential offerings. In the dynamic world of finance, possessing an API licence extends beyond a mere authorization – it embodies the capability to facilitate a variety of financial operations that cater to modern consumer needs and digital advancements. Let's explore the array of services that can be offered under an API licence, each contributing to a holistic financial ecosystem.

​

1. Facilitating Cash Transactions : An API licence equips its holder to offer services that enable cash deposits into and withdrawals from payment accounts. This includes overseeing the entirety of operations required to effectively manage and operate a payment account. This foundational service forms the cornerstone of seamless financial interactions.

​

2. Executing Payment Transactions : With an API licence, the licence holder gains the authority to execute a spectrum of payment transactions. This encompasses the orchestration of direct debits, credit transfers, and card payments. These transactional capabilities ensure that funds flow securely and efficiently between entities.

​

3. Empowering Payment Instruments : The issuance of payment instruments is a pivotal service under an API licence. This encompasses the issuance of credit or debit cards, empowering users with versatile tools to access and manage their finances. These instruments unlock convenience and accessibility in the modern financial landscape.

​

4. Navigating Payment Transactions : Acquiring payment transactions becomes a viable offering with an API licence. This service entails managing the reception and processing of payment transactions, ensuring a smooth and secure exchange of funds between parties involved.

​

5. Enabling Money Remittance : Money remittance is a vital service under an API licence, enabling the seamless transfer of funds across borders. This service empowers individuals and businesses to engage in global financial interactions without boundaries.

​

6. Empowering Account Information Services : An API licence holder is also empowered to provide account information services. This includes offering users access to comprehensive insights into their financial accounts, transactions, and balances. Such transparency fosters informed financial decisions.

​

7. Pioneering Payment Initiation Services : An API licence opens the doors to payment initiation services. This innovation allows users to initiate payments directly from their accounts to designated recipients, streamlining the payment process and enhancing convenience.

​

An Authorised Payment Institution (API) licence is more than a regulatory approval; it signifies the ability to offer a diverse suite of financial services that cater to modern demands. From executing payment transactions to empowering payment instruments and fostering transparency, each service under the API licence umbrella contributes to a seamless and comprehensive financial ecosystem. As the financial landscape continues to evolve, the API licence stands as a pivotal tool that bridges traditional finance with the digital age, meeting the needs of both consumers and businesses alike.

​

Capital Requirements: 

​

Securing an API licence demands a financial commitment upfront, which varies depending on the nature of the payment services you intend to provide. The initial capital required ranges from €20,000 to €125,000, providing a window of flexibility based on your chosen payment service. This initial capital injection sets the stage for your entry into the realm of authorised payment institutions.

​

Beyond the initial investment, ongoing capital is a continual necessity to maintain the vigour of your authorised payment institution. Calculating this ongoing capital requirement involves the utilization of one of three distinct methods. These methods are strategically designed to align with the nature and scope of your payment services, ensuring a proportional and pragmatic approach to capital adequacy.

​

Essential Requirements:

 

1. Minimum Capital Requirement: An initial capital amount is mandated to initiate an Authorised Payment Institution (API) venture. This capital acts as a financial cushion, demonstrating your institution's financial strength and ability to navigate the dynamic financial landscape.

2. Client Funds Safeguarding: Ensuring the security of client funds is of utmost importance. This can be achieved through either maintaining a segregated client bank account or acquiring an insurance policy. These measures safeguard client funds from financial uncertainties, emphasizing your institution's commitment to transparency and accountability.

3. Competent and Reputable Management: The leadership of your institution plays a pivotal role. Regulatory compliance dictates that the management body should have a proven track record of integrity and possess the necessary qualifications and experience to effectively fulfil their roles. This requirement underscores the importance of competent and ethical leadership at the helm of your API.

​

Meeting these key requirements isn't just about regulatory adherence; it reflects your dedication to professionalism, ethical practices, and creating a trustworthy and secure financial environment.

​

Fees: 

The Payment Institution (API) licence application entails an application fee ranging from £1,500 to £5,000. This fee is required to be paid upon the submission of your application.

​

Application Requirements & Documentation:

​

Applying for FCA authorization to establish yourself as an Authorised Payment Institution (API) is a process that demands comprehensive preparation and thorough documentation. Here's a guide outlining what you'll need to provide in conjunction with K2:

​

1. Complete Application Form and Supplementary Forms: The application journey begins with completing the designated application form and any supplementary forms required. These documents will be submitted through the FCA's online system, known as Connect.

​

2. Essential Information to Prepare:

​

1. Business Plan and Financial Forecasts: Craft a detailed business plan covering the next three years, including financial projections.

2. Programme of Operations: Clearly outline your intended operations.

3. Business Organization Description: Provide a concise overview of your business's organizational structure.

4. Initial Capital Evidence: Present documentation demonstrating your initial capital.

5. Safeguarding User Funds Details: Explain your strategy for ensuring the security of user funds.

6. Compliance, Governance, and Internal Controls: Describe your approach to compliance, governance, and internal controls.

7. Security Incident Handling Procedure: Detail the procedure for addressing security incidents and customer complaints related to security.

8. Sensitive Payment Data Management: Explain how you manage and control access to sensitive payment data.

9. Business Continuity Measures: Describe measures in place to ensure business continuity.

10. Data Collection Methodology: Clarify how you collect data related to performance, transactions, and fraud.

11. Security Policy: Include a copy of your security policy to demonstrate your commitment to cybersecurity.

12. Financial Crime Policy: Highlight your controls for adhering to anti-money laundering and countering-terrorist financing obligations.

13. Qualifying Holders Details: Provide information about individuals or entities holding or controlling 10% or more of the firm.

14. Outsourcing Arrangements: Disclose details of any outsourcing arrangements.

15. Management Team Details: Provide information about key individuals responsible for firm management.

​

Once these components are meticulously prepared, K2 Regulatory Consultants will guide you through the process of submitting them via the FCA's online platform, Connect. Our collaborative efforts will ensure that your application for FCA authorisation for the electronic money institution licence is thorough, compliant, and poised for success.

​

​

​

​

​

​

​