API License EU

What is an API?

An Authorized Payment InstitutionAuthorized Payment Institution (API) is a designation obtained through a license in the European Union under which the relevant entity is allowed to offer payment services within a particular region. These services include but are not limited to payment processing, money transfers, payment accounts and merchant services. While APIs are payment institutions, they are different from a bank as they are unable to hold any customer deposits. For anyone who is an aspiring entrepreneur or incumbent in the payment industry, the EU API License is the stepping stone in their money transfer industry.

Licensing Process

An Authorised Payment Institution (API) is a designation obtained through a license in the European Union under which the relevant entity is allowed to offer payment services within a particular region. These services include but are not limited to payment processing, money transfers, payment accounts and merchant services. While APIs are payment institutions, they are different from a bank as they are unable to hold any customer deposits. For anyone who is an aspiring entrepreneur or incumbent in the payment industry, the EU API License is the stepping stone in their money transfer industry.

Who regulates the EU API License?

The API License is issued by a regulatory authority that oversees the financial institutions of the particular country or region and ensures that compliance and transparency are maintained so that no customer is exploited. The EU API License legislation is regulated under the Directive of the European Parliament and of the council on payment services in the internal market which applies to all payment services provided within the Union and each country’s central bank must adhere to these licensing regulations and regulate the licenses in their country.

Who needs the EU API License?

Any entrepreneur, start-up or incumbent who wants to conduct business in the finance and payments sector in a specific country (or countries) within the EU, or in all of the EU must obtain an EU API License. With EU API License, you can provide almost all of the following services, but some countries may not allow some of these services under an EU API License:

  1. Initiation of payments
  2. Placement of funds in a payment account and its operation
  3. Foreign remittance
  4. Withdrawal of cash from payment accounts
  5. Execution of various payment transactions which include, but are not limited to, money transfers, standing orders, direct debits etc
  6. Acquisition of payment transactions
  7. Issuance of payment orders 
  8. Provision of information about accounts

Source: DIRECTIVE (EU) 2015/2366 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

Main Requirements to obtain an EU API License

How to apply for an EU API License?

To obtain an EU API License, a direct application must be made to the authorities of the Member State in which the registered office of the payment service provider is situated. You can find a list of the national registers of authorised payment institutions under the Payment Services Directive here. This is where we can help you. By contacting us through this form, we will walk you through the process of obtaining an EU API License, allowing you to explore your pathways and answering any questions you may have about the application and other associated processes. 

Required Documentation

Since there are over 25 nations in the EU, it is important to remember that not all of them have the exact same requirements to obtain an EU API License. However, the general requirements, which are common to most, if not all, countries are: 

  1. Evidence of initial capital: depending on the services your institution provides you may be required to provide evidence of initial capital between €20,000 to €125,000
  2. Business Plan
  3. Applicant’s governance arrangements and internal control mechanisms
  4. Details about the identity and qualifications of the personnel appointed to manage the institution 
  5. Details about the identity and qualifications of the people who hold the shares of the institution 
  6. Evidence of the necessary AML/CFT procedures put in place by the institution seeking a license
  7. Measures taken to safeguard the customer’s funds
  8. Details about the applicant’s operational plans

Timeframe and Additional  Services

Timeframe

After you have filled out this form, our team will get in touch with you shortly to debrief you on your next steps. Should you choose to sign up for our services, we will send you a complete list of required documentation for the EU API License. If the documents and the application submitted to us by your institution are complete, you should receive your license between 4 to 6 months. However, in case of incomplete applications, the process may be delayed up to 12 months or more. To avoid delays, you must read through our website in detail and submit all required documentation in a timely manner. 

Additional Services

While the process of obtaining an EU API License seems cumbersome and time consuming, it is not. We assist our clients with not just the technical and legal parts of the application but also support their business on a personalised level. Our team ensures that you are guided every step of the way, be it in terms of the responses to the business cycle, drafting of business plans, dealing with complications, obtaining all required licenses and much more.

By signing up for our services, you can put your mind at ease, sit back and relax because the process of obtaining an EU API License has never been smoother. We can assist you with the following services:

  1. Develop a business plan from a legal point of view
  2. Corporate structure and management team advising
  3. Prepare initial presentations for the relevant regulatory authorities that are involved in license issuance and attending meetings with them
  4. Registration and incorporation of the company
  5. Status update calls with clients on a weekly basis
  6. Management of all relevant processes involved for all related parties
  7. Preparation of the license application including all relevant documents
  8. Reviewing and helping you prepare answers to all related legal and non-legal questions
  9. Preparation of all future presentations and attendance of all subsequent meetings

These are the services we offer, but this isn’t all: we can help you set up payment safeguarding accounts with our partner institutions, devise plans for the future and improve areas which require your attention before applying for the license.

Ready to get your EU API License? Sign up now: *insert contact form*

This page was last updated on February 3, 2022.