Execution of payment transactions covered by a credit line
A payment transaction covered by a short-term credit line falls under PSD2 Annex I (4) and Article 18(4), and needs a PI, EMI or banking licence. For a non-bank institution, that credit line has to stay ancillary to the payment service and cannot be funded from client deposits. The licence still passports across the EEA.
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?
PSD2 Article 18(4) keeps a payment institution's credit purely ancillary to its payment transactions. It cannot be funded from safeguarded client money, and it must be repaid within the short period national supervisory guidance sets.
Can an EMI issue credit cards using client funds?
No. An EMI cannot fund a credit line from customer deposits or stored-value balances. The money has to come from the institution's own capital or an external bank facility, within set liquidity and exposure limits.
Sources
- PSD2 Annex I (4) and Art. 18(4) · retrieved 2026-09-24
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