SPI vs API License (UK)

Hello, My name is Faisal Khan. I’m a banking and payment consultant.

A question that I get asked a lot is what’s the difference between an SPI and an API with respect to UK licensing.

Well an SBI is a small payment institution license and an API is an authorized payment institution license. What’s the difference between the two?

SBI by the indication of “Small” SPI is starting application for a payment institution. So if you want to be a money transmitter, a money transfer operator etc. You need an SPI license. An SPI license holds a very low fee, about a thousand pounds I think so. It does not have a requirement for paid up capital. So you can have a thousand pounds paid-up capital, you can apply.

It does have a limit of I think if I’m not mistaken two or three million euros per month in processing. That’s the limitation placed. And it can only be used in the United Kingdom or in the country which was offered in Europe. So if you have an SBI license in the UK you can use it in UK can only you can become UK customers only. What differentiates it from an API is API is slightly more expensive. The application fees I think is 5000 when API does have a minimum requirement for paid up capital. The minimum paid up capital requirement is, I think I may be wrong slightly off on these number, I think it’s 200,000 euros or 2 percent of your paid up capital and whichever is greater. There is no monthly limit caps on how much you can process.

But here’s the best part, because you have API license from the UK you can passport it to countries outside the UK in the EEA the European Economic Area, and use it, and pick up customers from those countries. So you can actually use your UK API and pick up customers from Germany. You don’t have to go to Germany and get a license by BaFin again. You can do so in Lithuania, in Luxembourg and in Spain (I was going to say Brazil that would be really wrong right!), in Spain and Denmark etc.

So that one license allows you to passport it all over Europe and pick up customers from there. That’s the difference between the two.

Most institutions go for an SPI licensing and then upgrade to an API license once they have the money. That’s that’s the basic differentiator. The SPI is a great license to start with. Its a thousand pounds, no paid up capital, three million euros per month processing limit. And then once you have it once your business is up and running you can then go and apply an upgrade to an API license.

I hope I was able to answer the questions if you have any more ask below. Will see you next time. Take care.

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This page was last updated on December 10, 2019.