We are often asked what "license" is needed to provide payment services. Various terms are buzzing around. From small payment license, to PSD2 license, to e-money license.
Reason enough for us to clearly describe in this article which authorizations are actually required for which purpose. Here we start with the smallest authorization and move to the most extensive at the end of the article:
Register as an account information provider
If someone only wants to provide an "account information service", but no other payment services beyond that, then a mere registration with the Financial Market Authority (FMA) is sufficient. This is regulated by Section 15 of the Payment Services Act 2018 (ZaDiG 2018). An account information service provider is not subject to all the rules of ZaDiG 2018. So, such registration involves a little less effort compared to a licensing requirement, although it's not like you just have to send an ad to the FMA and then you can get started right away.
In the UK, this registration is known as a "RAISP certificate".
Concession as a payment institution
If you also want to provide other payment services, such as a payment initiation service, issuing or acquiring, financial transfer transactions, etc., then you first need a license from the FMA. Such service providers are referred to as payment service providers. Commonly this type of concession is also called a payment license, the companies as payment institutions.
The procedure for obtaining a concession as a payment institution is governed by sections 9 and 10 of the ZaDiG 2018. However, a corresponding concession only permits the provision of those payment services which are expressly mentioned in the concession notice. In the application it is necessary to state accordingly what payment services one intends to provide. The presentation of the business model, the budgeted accounts and the corresponding further documentation must specifically address these intended transactions.
If you have a license as a payment initiation service provider and want to provide acquiring services in the future, you must also apply to the FMA for a license. This also applies to traditional services that existed before PSD2, e.g., e-money services.B. the issuing or acquiring.
It should be borne in mind that the requirements for companies that merely want to provide payment initiation services are somewhat lower than if additional payment services are also planned, for example in terms of capital requirements and customer money protection. This has to do with the fact that a trigger service provider does not come into contact with the payment amounts to be transferred, but only technically triggers payments.
The payment institution license is sometimes referred to in the market as a "PI license", where PI stands for "Payment Institutions". There is also talk of a "PSD2 license", derived from the Second EU Payment Services Directive 2 (PSD2). PSD2 for short), whereby the term is not very meaningful, because it cannot be derived from it whether only account information services or also other payment services may be provided.
Incidentally, the terminology in Austria differs from that in Germany, which sometimes leads to confusion. While in Austria we speak of the obligation to obtain a license and a concession, in Germany we speak of the obligation to obtain a license or a concession. license or permission. This usually means the same thing.
Concession as an e-money institution
If a company not only wants to provide payment services, but also wants to issue e-money, then a concession as a payment institution is not sufficient. It then needs a license as an e-money institution. This concession is regulated in §. A license as an e-money institution entitles the holder not only to issue e-money, but also to provide all requested payment services. In other words, an e-money institution is a "super payment institution", it is allowed to issue electronic money and provide payment services. This is due to the fact that e-money is issued in order to make payments. Therefore, such companies hardly limit themselves to issuing e-money, but also organize the payment processing. In England, the license as an e-money institution is also referred to as an "e-money license" or "EMI license" (derived from the English terms e-money license and EMI license, respectively). e-money institutions).
Bank, credit institution or. CRR credit institution
If you want to provide banking services beyond the issuance of e-money and the provision of payment services, specifically deposit and/or lending business, you usually need a banking license from the European Central Bank as a CRR credit institution. In this respect, the legal situation has changed in recent years to the effect that it is now exclusively up to the ECB to decide whether to grant a license. The application must be submitted nationally, in Austria to the FMA. The latter examines all the documents, checks them and finally has to submit a proposal for a decision to the ECB. However, the latter is not bound by this and ultimately decides autonomously on the application.
A CRR credit institution may not only provide payment services and issue electronic money, but also accept deposits and grant loans. This may not payment and e-money institutions. They are therefore not allowed to grant interest on payment accounts.
Credit transactions can be provided by payment and e-money institutions, albeit on a small scale. However, this is only the case if it is an ancillary activity and it is carried out exclusively in connection with the execution of a payment transaction. In addition, the term of such credit may not exceed twelve months. Further requirements must be observed. If the credit business goes beyond that, it needs a concession as a CRR credit institution.
It should also be mentioned that there is a whole range of other banking business beyond deposit and lending business at national level, such as factoring, which is not governed by European law. For such banking transactions, the FMA is still responsible for deciding on a concession application. In Austria, the terms bank and credit institution or. CRR credit institutions are often used synonymously, although caution is advised in this regard, because a pure factoring bank differs from a CRR credit institution in many ways. For example, only the latter are allowed to operate across borders throughout the EU under the single license principle.
Therefore, it should always be carefully examined, which bank transactions are exactly needed. Thus may z.B. only a credit institution that is authorized to provide deposit and lending services or giro transactions is allowed by law to provide payment and e-money services.
No advance licenses possible
For all of the above concessions, no concessions will be granted for activities that are not appropriately outlined in the application as part of the company's business model. licenses are granted only for the activities that are actually intended to be provided. If, for example, one only wants to provide certain payment services, which one also describes accordingly, one does not get a concession as an e-money institution. Not even payment services that are not part of the business model are included in the license notice by the FMA.
Questions?
If you have any questions about concession procedures for payment, e-money or credit institutions, we are always at your disposal. We have z.B. in half of the concessions granted in Austria by the FMA, successfully accompanied the applicants and represented them in a legally friendly manner.