Payment institution license: PSD2 authorisation, capital and the EU passport.

Authorisation under PSD2 to provide one or more payment services listed in Annex I - acquiring, transfers, money remittance, payment initiation and the others - without being a bank or an e-money institution. Only a legal person established in a member state can hold it, with its head office in the state of its registered office, and once granted it is valid across the EU (Article 11). Every authorised institution appears in its supervisor's public register and in the EBA register (Articles 14 and 15).

PSD2 has no licence of that name: the phrase usually means payment institution authorisation, or payment initiation and account information status for open banking. Payment initiation needs authorisation with €50,000 initial capital and professional indemnity insurance; account information alone needs registration and the insurance, with no initial capital (Articles 5, 7 and 33).

€20,000 for money remittance only, €50,000 for payment initiation only and €125,000 for any of services 1 to 5 (Article 7). Once licensed, the institution calculates own funds by one of three methods the supervisor chooses (Article 9): A is 10% of the previous year's fixed overheads, B a share of payment volume, C an income-based indicator. Own funds may never fall below the initial capital (Article 8), and firms providing only payment initiation or account information are outside the three methods.

Initial capital of €20,000-€125,000 by service (Article 7), plus the supervisor's fee where one is charged. Ireland charges nothing for the application, Lithuania €898, Malta and Cyprus €10,000, the Netherlands €10,400 and Luxembourg €30,000; in the UK the FCA charges £5,640. Several supervisors add an annual fee once you are licensed. Company set-up, local staff and the file come on top; the table above lists each fee with its legal basis.

The supervisor must decide within three months of receiving the application or, if it is incomplete, of receiving all the information it needs, and must give reasons for a refusal (Article 12). In practice it takes longer: for applications filed in 2022-2024 the EBA found averages from 4-6 months in six member states to 27 months in Cyprus, with an EU median of 9.5 months leaving Cyprus aside, counted from filing to decision. Company set-up and pre-application talks come on top; each card above shows the timeline for its country.

A firm that a member state exempts from full authorisation under Article 32. The exemption covers only services 1 to 6 of Annex I, so no payment initiation or account information, and applies only while the total value of the firm's payment transactions, averaged per month over the previous 12 months, stays within a national limit of at most €3 million. A small payment institution keeps its head office where it trades and cannot passport; once it no longer meets the conditions, it has 30 days to apply for authorisation. The Netherlands, France, Spain, Poland and the Czech Republic run such routes in different forms; Poland caps its MIP at €1.5 million a month.

Yes. An authorised payment institution notifies its home supervisor, which forwards the notification to the host supervisor within a month; agents and branches start once they are entered in the register (Article 28). Small payment institutions cannot passport, and UK payment institutions have had no EU passport since Brexit.

An e-money institution can also issue e-money and needs €350,000 initial capital under the E-Money Directive (Article 4). A payment institution moves money but does not issue it, needs from €20,000 of initial capital and may not take deposits; the funds it receives for payments are not deposits but must be safeguarded (PSD2 Articles 10 and 18).

Yes, with each agent registered first: the institution sends its home supervisor the agent's details, AML controls, managers and services, and the supervisor says within two months whether the agent is entered in the register (Article 19). The institution must make sure its agents tell customers they act on its behalf.

Council and Parliament reached a provisional agreement on 27 November 2025 on a new Payment Services Regulation and a revised directive, widely called PSD3, that also covers e-money and repeals the E-Money Directive. Coreper confirmed the deal on 22 April 2026 and Parliament's ECON committee on 5 May 2026; the Council's first-reading position is pending, and Parliament's final vote is indicatively set for 14 December 2026. Until the texts are published and apply, national laws transposing PSD2 govern authorisation.

Capital and the passport are the same everywhere, so the choice comes down to market, language, fees and timing. Lithuania gives licensed payment institutions direct SEPA access through CENTROlink, France offers a €40,000 simplified licence for its domestic market, Malta and Ireland file in English, and the Netherlands publishes a €10,400 application fee. The cards above compare 11 EU countries and the UK.