Execution of payment transactions covered by a credit line
Executing payment transactions backed by a short-term credit line requires a payment institution (PI) licence, an electronic money institution (EMI) licence or a banking licence under PSD2 Annex I (4) and Article 18(4). For non-bank institutions, credit must remain ancillary to payment services, cannot be funded from client deposits, and is subject to EEA passporting rules.
Definition
Executing payment transactions where the funds are covered by a credit line granted to the user, within the limits PSD2 allows.
- PSD2, Annex I (4) and Art. 18(4): official text
Which licence you need
Licence families that typically permit this activity:
Where it can be licensed
| EU/EEA passport | Domestic | |
|---|---|---|
| Lithuania: Electronic money institution licence for non-limited activity | ✓ |
Frequently asked questions
What restrictions govern credit lines granted by payment institutions?
Under PSD2 Article 18(4), credit granted by a payment institution must be purely ancillary to payment transactions, cannot be funded from safeguarded client money, and must be repaid within short periods defined by national supervisory guidelines.
Can an EMI issue credit cards using client funds?
No, electronic money institutions cannot use customer deposits or stored-value balances to finance credit lines. Credit must be financed exclusively from the institution's own capital or external bank facilities, complying with strict liquidity and exposure limits.
Sources
- PSD2 Annex I (4) and Art. 18(4) · retrieved 2026-09-24
Planning execution of payment transactions covered by a credit line? Get the licence right first
Tell us your model and target markets. We check which licence it needs, and whether a narrower one will do, before you spend on an application.
A free preliminary assessment: we check your business model against the licence before you spend on an application. We handle this licence and any other fintech licence, including jurisdictions the Atlas does not cover yet.