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Obtaining a license for acquiring services in Europe

Consumers are increasingly making online payments, and many merchants believe they save time by accepting secure online payments. Moreover, approximately 46% of TSYS respondents preferred to receive emails about their transactions.

For these reasons, a licensed payment institution is a very attractive solution for financial service providers, fintech companies and startups.

In this article, we will talk about the possibilities of providing acquiring services in Europe and discuss the issue of licensing a payment processing company.

Payment processing business models in Europe

In general, only two models are possible:

  1. Technical maintenance of payments or provision of processing services. In this case, the company simply provides the technical conditions for online payments. It serves as a kind of intermediary between the buyer and the acquirer bank, while not dealing with finances.
  2. Full range of payment processing services or acquiring services. In addition to the services provided by the processing center, the institution assumes responsibility for the payment of funds to sellers of services or goods. That is, such a company is already working with finances.

Accordingly, in the second case, sellers working with the acquirer interact already with a regulated financial institution.

At the same time, more freedoms and opportunities require more responsibility. In almost all countries of the world, activities related to the transfer of money require obtaining a license for financial activities from the authorized body of the country where it is planned to conduct business.

Benefits of obtaining an acquiring license in the EU

Therefore, in the context of running a payment service business, Europe is attractive for starting. The PSD2 provides the legal basis for a single European payment market.

Obtaining an acquirer license in one of the EU member states opens up opportunities for business in all EU countries and the EEA. Moreover, the licensee can become a member of such payment systems as Mastercard, Visa, American Express, etc., and thereby make himself even less dependent on partner banks.

Obtaining an acquiring license in Europe

Depending on the selected country and the availability of all documents requested by the regulator, obtaining a license for a payment institution in Europe takes 6-12 months. In addition, significant financial investments will be required (the amount of capital can vary from EUR 20T to EUR 125T). Money is needed for licensing process, as well as ensuring the authorized capital and insurance deposit of the company.

An application for ordering a license for acquiring services, as we have already noted, along with the package of documents, is submitted to the authorized body of the selected state. Usually it is the Central Bank.

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Documents needed for obtaining an acquirer license

The package of documents usually includes:

  • Constituent documents and the AOA;
  • Description of the corporate structure;
  • Questionnaires of directors and key persons of the company;
  • Description of customer protection methods;
  • Security policy;
  • Confirmation of registered office address.

If you decide to order a license for payment processing services in the EU, then note that the above list is not exhaustive. A complete list of documents for European companies is provided in the guidelines issued by the EBA.

IQ Decision services

We draw your attention to the fact that his article should not be considered as legal advice or recommendations for specific actions. Obtaining a license for acquiring services is a rather time-consuming process, therefore, even at the initial stage of licensing, it would be advisable to enlist the support of reliable lawyers.

If you still have any questions related to licensing of a payment institution in Europe, IQ Decision experts are ready to answer them when providing legal advice on obtaining an acquiring license.

Moreover, our specialists provide all the necessary services for licensing of payment institutions, including:

  • Company registration in the EU;
  • Office registration;
  • Legal assistance in preparing documents for ordering an acquiring license;
  • Legal aid in preparing a business plan; and etc.

You can find out details about our company’s services, or order legal advice on obtaining an acquirer license by filling out the feedback form, or by calling our office directly at the contacts below.

  • The information outlined in the article is actual at the time of its publication.
  • Please refer to our specialists for checking possible solutions for your business.
  • Still have any questions?

    Fill out the form or contact us as you find convenient: skype, telegram, etc. Our experts will help you resolve the issue.

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