SPI License UK

The Complete Guide to Small Payment Institution Registration in the United Kingdom

An SPI license in the UK lets a company offer payment services, such as money remittance, on a registered basis with the Financial Conduct Authority (FCA), as long as its average monthly payment volume stays under 3 million euros. It is the entry-level regulatory status for payment businesses in the UK, sitting below the full Authorised Payment Institution (API) license.

This page explains what an SPI is, what it can and cannot do, what it costs, how long registration takes, and why a growing number of founders now buy an existing SPI company instead of applying for a new one. If you are here to evaluate that second route, ready-made SPIs are listed on DealHarbor, our marketplace for regulated financial services companies and licenses.

One point of precision before anything else. The FCA does not technically issue an SPI "license." Under the Payment Services Regulations 2017 (PSRs 2017), a Small Payment Institution is registered, while an Authorised Payment Institution is authorised. The industry calls it a license, and so does everyone searching for one, so this page uses the term. Just know that when you deal with the FCA, the correct word is registration.

What Is a Small Payment Institution (SPI)?

A Small Payment Institution is a firm registered with the FCA under Regulation 14 of the PSRs 2017 to provide payment services in the UK. The defining feature is the volume cap: the firm's average monthly payment transactions, measured over the preceding 12 months, must not exceed 3 million euros. If the firm has been trading for less than 12 months, or has not started yet, the test applies to its projected volumes instead.

The SPI regime exists because full API authorisation is expensive and slow, and the FCA recognised that a small money remitter moving a few hundred thousand pounds a month does not need the same prudential machinery as a firm processing billions. The SPI is the lighter-touch version: same rulebook family, fewer requirements, hard ceiling on volume.

The FCA supervises SPIs, holds them to the Money Laundering Regulations, and can cancel a registration for inactivity or non-compliance. It has done exactly that. In 2025 the FCA cancelled the registrations of SPIs that never started providing payment services or failed to file their regulatory returns. An SPI registration is not a trophy asset you park and forget. The FCA expects it to be used.

What an SPI Can Do

An SPI can provide most of the payment services listed in Schedule 1 of the PSRs 2017, including:

• Money remittance. Sending funds on behalf of a customer to a recipient, domestically or cross-border. This is the classic SPI business model.

• Operating payment accounts. Services enabling cash to be placed on or withdrawn from a payment account, and the operations required to run one.

• Executing payment transactions. Direct debits, credit transfers, and card-based payment transactions, whether or not funds are covered by a credit line.

• Card issuing and merchant acquiring. Issuing payment instruments or acquiring payment transactions, within the volume cap.

• Acting through agents. An SPI can register agents with the FCA and provide payment services through them. Agent volumes count toward the 3 million euro cap.

What an SPI Cannot Do

The restrictions matter as much as the permissions:

• No Account Information Services (AIS) or Payment Initiation Services (PIS). The open banking services are reserved for authorised firms and registered AISPs. An SPI cannot provide either.

• No volume above the cap. Average monthly payment transactions must stay at or below 3 million euros on a rolling 12-month basis. Breach the cap and the clock starts: the firm must apply for full API authorisation or wind down the regulated activity.

• No passporting. An SPI registration covers the UK only. Post-Brexit there is no passporting for any UK payment firm, but the SPI never had it even before Brexit. If you want to serve EU customers from an EU base, you need a separate license in an EU member state.

• No issuing e-money. Electronic money issuance falls under the Electronic Money Regulations 2011 and requires EMI or small EMI status, not an SPI registration.

SPI vs API: Which One Do You Need?

The decision logic is simple. If your realistic 24-month volume projection stays comfortably under 3 million euros a month, the SPI is the rational starting point. If your model only works at scale, applying for an SPI first and upgrading later costs you two application processes and a dangerous transition window. Model your volumes honestly before you choose.

Requirements for SPI Registration in the UK

To register as an SPI, a firm must satisfy the FCA on the following:

Location. The head office, registered office, or place of residence must be in the UK. The FCA also expects the "mind and management" of the business, meaning the people who actually run it, to be in the UK. A UK shell company run entirely from abroad will not clear the gateway.

Volume. Average monthly payment transactions, including those executed through agents, must not exceed 3 million euros over the preceding 12 months, or on a projected basis for new firms.

Fit and proper people. Every director and every manager responsible for payment services must be of good repute with appropriate knowledge and experience. None of the managers may have convictions for money laundering, terrorist financing, or other financial crimes. Anyone holding a qualifying holding (10 percent or more of shares or voting rights) must also be fit and proper.

Money Laundering Regulations compliance. The firm must comply with the MLRs, which in practice means a documented AML/CTF framework, customer due diligence procedures, transaction monitoring proportionate to the business, and an appointed Money Laundering Reporting Officer (MLRO).

No supervisory obstacles. Close links to other entities, or foreign laws applying to those entities, must not prevent the FCA from supervising the firm effectively.

A credible programme of operations. The application requires a description of the payment services to be provided, the business structure, financial projections, and details of any outsourcing arrangements. The FCA reads these. Thin, templated applications are one of the main reasons SPI registrations stall or fail.

There is no minimum initial capital requirement for an SPI. That is one of the regime's genuine advantages. But no capital requirement does not mean no money. The FCA expects evidence of financial soundness, and banks (who matter more than the regulator for your day-to-day survival) expect considerably more than that.

What Does an SPI License Cost?

The FCA application fee is the smallest number in the budget, and it recently went up. SPI registration used to sit in the FCA's Category 2 fee band at roughly 500 pounds. Because SPI applications now take the FCA far longer to assess than they did when the regime launched, the fee moved to Category 3, which puts it at around 1,100 pounds. The fee is non-refundable, whether or not the application succeeds.

The real cost of getting an SPI registered is everything around the fee:

• Application preparation. A regulator-ready programme of operations, business plan, AML framework, and individual forms for every director and the MLRO. Done properly with professional support, expect 5,000 to 20,000 pounds depending on complexity.

• Company setup and substance. UK incorporation, registered office, and enough real UK presence to satisfy the mind-and-management expectation.

• People. A credible MLRO and directors the FCA will accept. If your founding team lacks payments or compliance experience, you will need to hire it before you apply, not after.

• Banking. The registration itself does not come with a bank account. Securing a safeguarding-capable or client-money-friendly account for a small remittance startup is frequently harder than the registration. Budget time and money for it.

• Ongoing costs. Annual FCA fees, MLR compliance, regulatory returns (the FSA057 annual return), and the compliance staff time to keep all of it current.

A realistic all-in figure for going from zero to an operating, banked SPI is 25,000 to 60,000 pounds, before working capital. Anyone quoting you the FCA fee as "the cost of an SPI license" is not telling you the whole story.

How Long Does SPI Registration Take?

On paper, the FCA must decide within 3 months of receiving a complete application, and within 12 months of receiving an incomplete one. The word doing the heavy lifting in that sentence is "complete." The FCA decides what complete means, and every request for further information effectively resets the quality of your position.

In practice, current SPI registrations commonly take 6 to 12 months from submission to decision. Three things drive this:

1. FCA workload and gateway posture. The FCA has hardened its authorisation gateway across all payment firms. Refusal, withdrawal, and rejection rates have risen sharply compared with the pre-2022 era, and applications that would have sailed through in 2019 now get detailed scrutiny.

2. Application quality. Most delays are self-inflicted. Incomplete AML frameworks, generic business plans, and directors with unexplained gaps generate information requests, and every information request adds weeks.

3. Case officer assignment. A meaningful part of the elapsed time is simply waiting for a case officer to pick up the file.

We covered the FCA's restrictive posture in detail in our public advisory on the current FCA licensing landscape. The short version: the FCA is deliberately slow and deliberately selective, and it has stated as much in its own gateway reporting. Plan for the pessimistic end of the timeline, not the statutory one.

This timeline reality is the single biggest reason the acquisition route exists. More on that below.

The 3 Million Euro Ceiling: What Happens When You Grow

The volume cap is not a soft target. Once an SPI's average monthly payment transactions exceed 3 million euros over the preceding 12 months, the firm has 30 days to apply for full API authorisation or cease the regulated activity. Thirty days is nowhere near enough time to prepare a genuine API application from a standing start, which means the firm either prepared in advance or it is now operating in a precarious position while an urgent application is assembled.

The practical rule: if your growth trajectory points at the cap, start the API upgrade process 6 to 9 months before you expect to hit it. The cap is calculated on the rolling 12-month average, so a single strong month does not trigger it, but a sustained ramp will, and the FCA sees your volumes through your regulatory returns.

For buyers of existing SPIs, this cuts both ways. An SPI with volumes near the cap has proven demand but a forced, expensive upgrade on the near horizon. An SPI with minimal volumes has headroom but must be genuinely active, because the FCA cancels dormant registrations.

Ongoing Obligations: What the FCA Expects After Registration

Registration is the start of the relationship with the FCA, not the end of it.

Use it or lose it. The FCA can cancel an SPI registration if the firm does not provide payment services within 12 months, or stops providing them. In 2025 the FCA cancelled multiple SPI registrations on exactly these grounds, including firms that registered and never launched, and firms that failed to file annual returns. A registration bought or obtained as a shelf asset, with no activity behind it, is a cancellation waiting to happen.

Regulatory reporting. SPIs file an annual return (FSA057) covering their activity and volumes. Missed returns are one of the fastest routes to FCA attention.

Notification of changes. Changes to directors, managers, the MLRO, qualifying holdings, or agents must be notified to the FCA through Connect. This matters directly in an acquisition: when the shareholders and directors of an SPI change, the FCA must be informed, and the new people are assessed against the same fit and proper standard as the originals.

Safeguarding, and the 2026 rule change. SPIs are not legally required to safeguard customer funds. That has always been the regime's most controversial feature. Two things have changed the picture. First, the FCA has made clear it expects firms holding customer funds to protect them regardless of legal minimums, and an SPI with no safeguarding arrangements will struggle with banks and with any future API upgrade. Second, the FCA's new safeguarding regime under Policy Statement PS25/12 took effect on 7 May 2026, tightening the operational rules for payments and e-money firms that safeguard. An SPI that opts in to safeguarding must now comply with the strengthened framework. For any SPI actually holding customer money, treat safeguarding as mandatory in practice, whatever the regulations technically permit.

AML on par with the big firms. The Money Laundering Regulations do not scale down for SPIs. Customer due diligence, sanctions screening, suspicious activity reporting, and MLRO obligations apply in full. The FCA's enforcement focus on money remittance firms falls disproportionately on small ones, because that is where controls tend to be weakest.

Two Ways to Get an SPI: Apply or Acquire

Everything above describes the apply-from-scratch route. It works, it is the cheaper route on paper, and for founders with time, clean profiles, and a genuinely small-scale model, it remains viable. But it carries the two costs the FCA has quietly imposed on the whole market: time and uncertainty. Six to twelve months of waiting, with a real possibility of refusal or a forced withdrawal at the end of it, is a heavy price for a business trying to launch.

The alternative is buying a company that already holds an SPI registration. In an acquisition, you purchase the shares of the UK entity that holds the registration. The registration stays with the company; the ownership of the company changes. Done correctly, this compresses a 6 to 12 month regulatory timeline into a transaction timeline, and replaces application risk with due diligence risk, which a competent buyer can actually manage.

What a ready-made SPI acquisition genuinely gets you:

• The registration, immediately. The company is already on the FCA register. There is no application queue.

• Operating history. An SPI that has been active and filing returns has a compliance track record, which matters to banks and future counterparties.

• Sometimes, the harder assets. Banking relationships, payout partnerships, an agent network, or an existing customer base. In many deals these are worth more than the registration itself.

What it does not get you:

• A free pass on fitness and propriety. The FCA must be notified of the change in qualifying holdings and management, and the incoming owners and directors are assessed. If you would fail the fit and proper test as an applicant, you will fail it as an acquirer.

• Immunity from the entity's past. You buy the company's history along with its registration: its liabilities, its filings, its conduct. Diligence on an SPI target covers regulatory correspondence, return filing history, AML file quality, any customer complaints, tax position, and the real status of its bank accounts. A registration attached to a company with a dormant FCA file or dying banking relationships is worth far less than its asking price.

• An excuse to stay dormant. The FCA's 2025 cancellations of inactive SPIs apply with full force to acquired ones. Buy it to operate it.

Priced and diligenced properly, acquisition is the faster and more certain route for funded teams that need to be live in the UK market this year, not next year.

What Faisal Khan LLC Does (and Does Not Do) on SPI Licensing

To be direct about our role, because most pages on this topic are written by firms selling application services, and this one is not.

We do not prepare or file new SPI applications with the FCA, and we do not offer SPI sponsorship or agent-of-a-principal arrangements. The application-services market is crowded, and the FCA's current posture means even well-prepared applications carry real timeline and refusal risk that no consultant can price away.

What we do operate is DealHarbor, a marketplace where vetted, ready-made regulated companies, including UK SPIs, are listed for acquisition. Sellers list entities with their registration status, operating history, and included assets. Buyers get a structured way to evaluate and transact on companies that already hold the status they would otherwise wait a year to obtain.

If you are weighing the apply-versus-acquire decision, the honest filter is this: if you have more time than money and a small-scale model, apply. If you have funding, a launch deadline, and a team that will pass the fit and proper test, look at what is available to acquire first.

SPI License UK: Frequently Asked Questions

Is an SPI license the same as a money transfer license in the UK?

Functionally, for a small operator, yes. Money remittance is the most common service SPIs are registered for. The formal instrument is an FCA registration as a Small Payment Institution under the PSRs 2017.

Can a foreigner own a UK SPI?

Yes. There is no nationality restriction on ownership. The company must have its head office in the UK with real management presence there, and all qualifying shareholders and directors must pass the FCA's fit and proper assessment.

Does an SPI license cover crypto?

No. Crypto asset activities in the UK fall under a separate FCA registration regime, and the UK is moving crypto into a fuller authorisation framework. An SPI registration covers fiat payment services only.

Can an SPI hold client funds?

It can, in the course of executing payment transactions. It is not legally required to safeguard those funds, but the FCA expects protection in practice, banks demand it, and any SPI that opts in to safeguarding must comply with the strengthened safeguarding rules in force since 7 May 2026.

How much does an SPI license cost in the UK?

The FCA fee is around 1,100 pounds (Category 3). A realistic all-in budget for a properly prepared, banked, operating SPI is 25,000 to 60,000 pounds. Acquiring an existing SPI company is priced by the market and depends on the entity's history, banking, and included assets.

How long does it take to get an SPI license?

The statutory window is 3 months for a complete application, but in current conditions expect 6 to 12 months. Acquiring an existing SPI compresses this to the length of the transaction and the FCA's processing of the ownership-change notifications.

What happens if an SPI exceeds the 3 million euro monthly limit?

It has 30 days to apply for full API authorisation or stop the regulated activity. Firms expecting growth should begin the API process 6 to 9 months before reaching the threshold.

Ready to Move?

If the analysis above points you toward acquiring rather than applying, the current inventory of ready-made SPI companies and other regulated payment entities is listed on DealHarbor. Each listing sets out the registration status, operating history, and what is included in the sale, so you can run your diligence before you commit to anything.

This page is for general information and is not legal advice. Regulatory requirements, fees, and FCA practice change. Verify current requirements with the FCA or qualified UK counsel before acting.