Money Transfer License UK

How to Get a UK Money Transfer License

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.

If you want to provide payment services, such as money transfer, in the UK, you will need to obtain a license before you can operate. There are two primary licenses that a business can get depending on the kind of services they are providing: the E-money institution license and the Payment Institution license.

SPI License
API License
EMI License
tl;dr versions.

E-Money Institution License

If your business is planning to create and issue electronic money (or e-money) then you will have to get registered as a Small Electronic Money Institution (SEMI) or an authorized Electronic Money Institution.

Small EMI VS Authorized EMI

The difference between these two is in the amount of money that will be generated. According to the FCA, if your business will not “generate more than an average of €5m of outstanding e-money immediately before registration”, then you can apply as a small EMI.

However, if you will generate more than the specified €5m, then your business will need to register as an authorized EMI.

Payment Institution License

The Payment Institution license is for businesses that will be operating as payment services providers. If you are a money transfer operator who will be offering services like sending and receiving the money to and from the country, you will need a money transfer license in the UK.

Similar to the EMI, there are two kinds of Payments Institution (PI) licenses: the Small Payments Institution (SPI) or the Authorized Payment Institution (API). Depending on the amount of revenue your business will generate, you will have to obtain one or the other before you can start offering your services.

Difference Between API and SPI

In the 12 months preceding your application, if your average monthly turnover in payment transactions was less than €3 million per month, you can register as an SPI. If they exceeded the €3 million mark, then you will register as an API.

What is the Process for Getting a Money Transfer License in the UK?

UK Money Transfer License – Step by Step Guide

  1. Prepare Documents

    When applying as a payments services company to operate in the UK, you will have to provide a lot of documents proving and explaining the workings of your company. This process might require the assistance of financial services experts so be prepared for this.

  2. Bank Accounts and Other Corporate Matters

    Getting a bank account for your business in the UK can take anywhere between a few days to months.

  3. Sign up on the FCA Connect Platform

    Connect is the FCA’s online portal for handling all license applications and related matters. You will register for a new account before you can proceed.

  4. Complete the Relevant Application

    Depending on the license you need, you will fill in an application and attach all relevant documents for example business model documents, PSD individual forms for all persons handling the firm and many more.

  5. Application Fee

    The fee for the license is different for each kind of payment institution.
    SPI: £500
    API: £1500 or £5000 depending on services provided
    More fee details here.

  6. Official Inquiry

    Once you submit everything, the FCA conducts an official inquiry to determine whether to approve or reject your application. The whole process can take anywhere between 3 to 12 months and sometimes even more.

Costs of Getting an MTL in the UK

In addition to the fees mentioned above in our step-by-step guide, there will also be many other costs that will pile up when you start the process. In order to apply for your license, your company will need to fulfill the requirement for authorized capital. This can be up to €35,000.

In addition to this, there will be the cost of running a complete office location in the UK including hiring a director with an annual salary of approximately £ 60,000 to £ 70,000.

If all this sounds like something you just cannot afford or you want to be up and running as soon as possible, we have just the option for you.

Launch Your Business Today

Quick & Legal Access to License Coverage for a Money Transfer Business in the UK

This page was last updated on December 20, 2023.

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