PI Licence: Payment Institution Authorisation in Europe

A Payment Institution (PI) licence is an EU authorisation issued under PSD2 (Directive (EU) 2015/2366) by a national competent authority. It permits your company to provide the full range of PSD2 payment services, including credit transfers, direct debits, card acquiring, money remittance, currency exchange, payment initiation and account information services, and to passport those activities across 30 EU/EEA countries from a single authorisation. A PI cannot issue electronic money or hold client balances as stored e‑money value.

The key difference is e-money issuance. An EMI can issue electronic money and hold client funds as stored e-money balances. A PI provides all the same PSD2 payment services but cannot issue e-money or maintain stored-value accounts. A PI requires lower initial capital (€20,000 to €125,000 vs €350,000 for an EMI) and is typically authorised faster. If your model does not require stored client balances or e-money wallets, a PI is the more capital‑efficient route.

PSD2 sets three capital tiers based on services. Money remittance only: €20,000 minimum. Payment initiation services only: €50,000 minimum. All other PSD2 services (credit transfers, direct debits, card acquiring): €125,000 minimum. NCAs also assess ongoing capital adequacy using one of three methods: fixed overhead requirement, transaction volume percentage, or relevant indicator with a scaling factor. Regulators expect capital above the minimum at application stage. Contact us for a capital planning assessment.

All four NCAs conduct a fit-and-proper assessment of directors, shareholders holding 10% or more of voting rights and key function holders. Your management body must have adequate education and experience. You will need a dedicated MLRO, an information security officer and a compliance function. The four eyes principle applies: at least two persons must effectively direct the business. NCAs assess management time commitment and local availability during the review process.

A complete PI application includes: programme of operations, business plan with three-year financial projections, AML/CFT policies and procedures, safeguarding arrangements description, governance structure and management body questionnaires, IT security and business continuity plan, organisational chart, shareholder and UBO documentation with source of funds, evidence of initial capital, and professional indemnity insurance where required. Incomplete submissions pause the NCA review clock. Contact us for a full document checklist.

Under PSD2, NCAs must decide within 3 months of a complete application. In practice the clock pauses when the regulator issues supplementary information requests. The full process from pre-application meeting to receiving the licence typically takes 6 to 9 months for a PI, which is faster than an EMI (9 to 12 months). Lithuania and Latvia tend to be the most efficient of our four jurisdictions. All NCAs strongly encourage a pre-application meeting before formal submission.

A PI must safeguard client funds received in connection with payment transactions. Options under PSD2 include segregating client funds in a dedicated account at an EU credit institution, separate from the PI’s own funds, or covering them with an insurance policy or comparable guarantee. Unlike an EMI, a PI does not hold client funds as stored e-money; funds must be safeguarded only for the duration of payment execution and remitted to the payee promptly. We assist with bank introductions for PI safeguarding accounts.

All four NCAs encourage a pre-application meeting before formal submission. At this stage your company does not need to be incorporated yet. The NCA reviews your planned business model, services and structure, and advises on documents and common deficiencies. This meeting typically reduces supplementary information queries during formal review and can shorten the overall timeline. We coordinate pre-application meetings as part of the Platinum and Custom packages.

Yes. A licensed PI can open and maintain payment accounts and facilitate SEPA transactions for clients. Access to SEPA credit transfers and SEPA Instant depends on the PI’s banking arrangements. Lithuania’s CENTROlink and Latvia’s EKS provide direct SEPA access for licensed payment institutions. Card-based payment accounts may also be offered under a PI licence. Note that a PI cannot hold funds as stored e-money balances; client funds pass through to designated payee accounts.

Yes. All four jurisdictions require your PI to have its registered and head office in the member state, and management must effectively direct operations from there. You need at minimum a locally based MLRO and senior management available to the NCA. NCAs conduct substance assessments during the application review and may interview key personnel. We provide substance solutions, including outsourced MLRO and compliance officer services, across all four jurisdictions.

A Small PI (restricted activity licence) is available in Lithuania and Latvia as a sandbox entry point. It has no minimum capital requirement, faster authorisation (3 to 4 months) and simplified governance requirements. However, it is limited to domestic operations only (no EU passporting), has a restricted service scope (no PIS or AIS) and imposes transaction volume limits. It is designed for startups testing a business model before upgrading to a full PI with EU passporting rights. Contact us to assess which tier fits your stage.

Authorised PIs must maintain an active MLRO and compliance function, submit regular prudential and AML/CFT reports to the NCA (typically quarterly and annually), maintain ongoing capital adequacy and conduct annual AML/CFT risk assessments. Any material changes to the business model, key personnel or ownership structure require prior NCA notification or approval. Annual supervisory fees are charged based on the PI’s transaction volumes. MAXCORP provides ongoing compliance support and regulatory reporting assistance after authorisation.