Provider payment systems

Provider payment system registration and obtaining relevant licenses

Properly created and licensed payment systems (PS) allow to carry out financial transactions via the Internet and using plastic cards. This type of business is one of the most widespread and profitable types of activities in the market.

Provider payment system registration is a laborious task. The main obstacles concern the preparation and execution of a large number of documents, as well as the knowledge of the current legislation and its peculiarities.

Users of this product get the opportunity to make payments for:

• Utilities
• Cable and satellite television
• Advertising services
• Mobile communications
• Purchases in online stores and other

Provider payment system registration: Types and their peculiarities

All provider payment systems are classified as follows:

• Domestic. Such a payment organization is a resident of a certain country and carries out its activity and transfers funds only within the limits of one state.
• International. The organization may or may not be a resident, and its activity covers two or more countries. Financial transactions and transfers are made within such a payment system, including payments from one country to another.

In many cases, a provider payment system is registered in the region where it is going to operate. For example, if a businessman wishes to operate in the territory of the European Union, the European country is usually selected for registration.

What is necessary for a provider payment system registration

To register a provider payment system, a payment organization should submit a set of documents necessary for getting approval of the rules of such a system by the regulatory authorities of the country.

This procedure requires serious preparation. First of all, statements from company registers are needed, as well as other documents that outline the following information:

• The organizational structure of the PS, including data on the company, bank accounts, settlement banks, processing centers, and so on.
• The system of managing liquidity risks, as well as credit, legal, and operational risks.
• The procedure of rendering services to the clients of the payment system.
• Payment instruments used to initiate and pay out the money transfer.
• The technology of ensuring money transfer by PS clients, as well as exchange and protection of information inside the system.

In addition, company policies governing the following are required:

• Anti-Money Laundering and Anti-Terrorist Financing requirements that apply to PS customers, as well as how they comply with those requirements.
• Procedures for ensuring compliance with FATF recommendations for the development of financial anti-money laundering measures.

Having decided to register a payment system, an organization must make sure it meets the above requirements and prepare all the necessary documents. Keep in mind that the above list is only an example. In practice, additional documents may be required because the demands vary and may differ from jurisdiction to jurisdiction.

Moreover, you can buy an already established and licensed payment system. For additional consultations, please contact our managers.

What payment system license is necessary?

The provider payment system creation is a rather complicated and multistage process. Our managers are ready to help you with licensing and registration of different licenses necessary for payment system registration.

A license is a tool that allows you to develop your business globally. Licensing opens up possibilities to integrate your company into various global systems of financial information processing, which allows you to expand your client base several times. For this purpose, you must obtain a license for providing payment services:

• PSP/MSO — to provide money transfer services.
• EMI/SVF — for the same services, including the possibility to issue individual currency.

Provider payment system registration: Why do we need a processing center?

To process the payments made via bank cards in e-commerce, an automated system is required. A processing center serves as it.

It allows online marketplaces to accept payments from credit or debit plastic cards. The processing center also monitors and coordinates payments between the bank that issued the card and the bank processing the financial transaction.

Owners must obtain one of two licenses if the payment system is registered in Europe — EMI or PSP. These licenses differ, as well as the requirements for obtaining them. As a rule, EMI is issued to ensure the operation of a PS as this license includes all the features that PSP provides but also gives the right to issue electronic money:

• EMI (Electronic Money Institution) is a type of company financial licensing. It is required for registering payment systems that can subsequently open e-wallets for their clients. Having received such a license, companies do not become banks, but they will be able to provide various banking and financial services.
• PSP (Payment Service Provider) is a license providing a range of payment services, including payment transactions, money transfers, and issuing or acquiring payment instruments.

There are also Small EMI/PSPs whose functionality is identical to full licenses, but licensed companies will be able to operate only within the country-registrar and with restrictions on the turnover of funds.

Obtaining a payment system license is a time-consuming process, and licensing takes six months on average. Moreover, additional documents or information may be requested from business owners.

Payment system license: What is required from the licensee

To get a payment system license, you must submit a corresponding application to the supervisory authority of the country, as well as a package of documents. In addition, you must meet at least the following requirements:

• The crystal clear financial reputation of the management company, as well as the founders and management staff.
• Limitation of monthly turnover if required by regulatory authorities.
• Availability of a registered office in the territory of the country where the application for licensing is submitted.
• PS activities must not violate the legislation of the state where the licensing takes place.
• At least one director of the company must be a resident of the country where the company is registered.

If you are interested in registration or payment system license, please contact our managers for consultations. We have extensive experience in registering various payment systems as the financial sector is one of our main areas. We know the nuances of the procedure and take into account the peculiarities of different countries' legislation. Trust our specialists to minimize the probability of being denied a license.

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