Public Advisory for Money Transfer Licensing in the UK
The Financial Conduct Authority (FCA) in the UK has implemented a stringent and restrictive approach to licensing, resulting in significant delays and a sharp decrease in approval rates. Entrepreneurs seeking licenses must carefully consider the challenges and requirements before proceeding. Read more here.
Any business that wishes to operate as a Payment Institution and deal with E-Money must obtain a Small Electronic Money Institution (SEMI) License. With the SEMI License, you can not only enter the UK’s financial markets but also offer electronic money services, including prepaid debit cards, payment cards and electronic wallets. Through the licensing process, we will walk you through every step that you must follow in order to obtain a SEMI License in the UK.
What services can you offer with a SEMI License in the UK?
A SEMI License allows your institution to offer some services that are offered by a Small Payment Institution along with the issuance and redemption of electronic money. Thus, the scope of services that can be offered under a SEMI License is huge, some of which are outlined below:
- Issue electronic money in the form of electronic wallets and prepaid cards amongst other mediums
- Services that allow cash placement and operation of a payment account
- Services that allow cash withdrawal and operation of a payment account
- Execute payment transactions including direct debits, transfer of funds, credit transfers etc using the user’s or another payment service provider or through a payment card or a similar device.
- Execute payment transactions including direct debits, transfer of funds, credit transfers etc where the funds are covered by a credit line
- Money remittance
- Issuance of payment instruments or acquisition of payment transactions
Who regulates the SEMI License in the UK?
In order to enter the UK’s financial markets and offer electronic money services, you must obtain a SEMI License. To do so, you must make an application to the Financial Conduct Authority (FCA) in the UK. The FCA is the regulatory body of the UK’s financial services that oversees around 50,000 financial institutions and ensures that they maintain transparency and compliance. This is necessary in order to avoid consumer exploitation. As per the FCA’s instructions, an institution is subject to abide by the Electronic Money Regulations 2011 (EMRs) and the Payment Services Regulations 2017 (PSRs). In addition to these, they must also comply with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
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This page was last updated on May 30, 2023.
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