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Requirements for the founders and management of the European payment system: TOP-5 important aspects for obtaining a payment license.

posted 5 years ago

Obtaining a payment license in Europe is a complex and lengthy process. For its successful launch a thorough preparation of legal professionals is needed. One of the important factors is compliance with the legal requirements for the founders and the board of the payment system.

Founders (the ultimate beneficiaries) are persons who have a stake in the company and receive a net profit. Board members (management) – those who manage the company. Founders may have a stake in the company, and also carry out management.

Let’s take a look at the general requirements for beneficiaries and the board of a company in obtaining a payment license in European jurisdiction:

1. Work experience and education for the management of a payment system company

This requirement from the regulator of European jurisdiction is obvious, since the payment system cannot function without an effective manager.

A member of the board must have at least one year experience in a company that provided financial services, or was directly related to this type of activity – accounting, auditing, legal in the relevant industry and other types of financial services.

In addition, a member of the board is required to receive an education in legislation, economics,
management or business.

If a company is managed by several managers, then at least one of them must have the aforementioned experience and education.

2. Reputation of beneficiaries and board members to create a financial company

A person cannot be a beneficiary or in the management of a company if he has been convicted of a crime or criminal offense against property, property rights and interests, a violation in the field of funded services and, accordingly, this criminal record has not yet been withdrawn. Also, if an administrative fine or other sanctions were imposed on a person for violating the law governing the activities of financial institutions, and three years have not passed since then.

The reputation of the beneficiary and members of the board in the financial services sector is an important factor, since the regulator cannot allow this to happen in future and there any for any complications in the process of providing financial services to customers to occur.

3. Confirmation of funds for establishing a payment system

One of the factors that the financial regulator pays attention to when registering a company is the confirmation of the funds of the beneficiaries for obtaining a payment license.

If you plan to obtain an EMI (Electronic Money Institution) license in Lithuania, the UK or other European jurisdictions, then you need to deposit an authorized capital of 350,000 euros into the account, and if you plan to obtain a PSP (Payment Service Provider) license, you need to deposit 25,000, 50,000, or 125,000 euros per account, depending on the functionality of the payment system itself.

The founders of the company must submit proof of income in the form of wages, income from the sale of real estate, income in the form of dividends on owning a business, selling intellectual property, royalties etc. It is important that all sources of income are confirmed and taxes are paid. If this issue causes you certain difficulties, then the specialists of our company will be happy to help you.

4. Communication with the country of registration of the payment system

If the beneficiaries are not residents of the countries where the payment license is purchased, then you must definitely find employees who will be in the management of the company from this country. We recommend finding a local director, AML, compliance officers, an auditor, etc.

The above employees will have knowledge of both international and national law, know the local language, and, accordingly, will be able to quickly and efficiently communicate with the regulator if necessary.

It is important for the regulator to understand that the company is connected with the jurisdiction where E-money and PSP licenses are obtained and will be able to quickly respond to comments from customers. We also recommend for our customers to rent a local office where the above employees can work.

5. Understanding of the business and all processes of the payment system

According to our experience, when applying for an EMI, PSP licenses, the regulator checks whether there is sufficient knowledge for managing the payment system, in particular, understanding the business plan, justifying the planned income, how customers will be attracted, what kind of marketing strategy will be etc.

If the beneficiary does not have the appropriate knowledge, we recommend you to find the proper employers who will be responsible for specific areas of the payment institution.

The specialists of our company can help you to obtain a turnkey payment license. This means that we not only prepare all of the necessary legal documents, but also help with the search of local workers, an office and etc.

We understand that an integrated approach to customer needs will provide a quick and efficient process of obtaining a payment license in European jurisdiction.


posted 6 days ago


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