Authorised Payment Institution (API) (United Kingdom)

At a glance

What it lets you do, and where

What does a UK Authorised Payment Institution licence let you do, and where can you serve clients?

A UK API licence covers the payment services in PSRs 2017 Schedule 1, and Regulation 32 adds ancillary services, payment systems and other business, plus credit limits linked to Schedule 1 paragraph 1(d) and (e). On serving clients, the FCA Approach Document Chapter 6 confirms the UK's participation in the passporting regime ended on 31 December 2020, and the 2018 EU Exit Regulations revoked passporting rights.²²⁹²³

Activities it covers

Where it is valid

Do you need it, and is United Kingdom the right choice?

What is a UK Authorised Payment Institution licence and do you actually need one?

A UK Authorised Payment Institution (API) licence lets a firm carry out the payment services defined in the Payment Services Regulations 2017, Schedule 1, activities (a) to (h). FCA guidance distinguishes APIs from Small Payment Institutions using a €3 million monthly turnover ceiling, so you need the API route once you sit above that ceiling. Regulations 5 and 6 of SI 2017/752 set the statutory authorisation framework.²⁴²⁵²

Is a UK API the right licence for your model, and when is the UK the wrong choice?

An API may be the right fit if you provide payment services under PSRs 2017. If your monthly turnover stays at or below the €3 million limit, PSRs 2017 Regulation 14 sets registration criteria for a Small Payment Institution instead. Whichever route applies, the FCA Authorisations Guide requires applicants to be ready, willing and organised to comply with regulatory standards.²⁶²¹²⁷

Small Payment Institution or full Authorised Payment Institution in the UK, what happens above the statutory limits?

Above the statutory limits, you must move to full Authorised Payment Institution authorisation. PSRs 2017 Regulation 14 sets the conditions for Small Payment Institution registration and a €3m monthly turnover ceiling. Regulation 16 requires an SPI to apply for full API authorisation within 30 days of exceeding the financial limits. FCA FEES 3 Annex 8 places Small Payment Institutions in Category 3 and authorised payment institutions in Category 4.²⁶²⁸²⁹

What happens to customer money if a UK payment institution fails, does safeguarding protect it?

Yes, safeguarding applies to customer funds. PSRs 2017 Regulation 23 imposes statutory safeguarding duties and asset segregation on payment institutions. FCA PS25/12 and the CASS 15 handbook rules set out safeguarding distribution mechanics and reconciliation expectations. However, the Court of Appeal held that the EMRs, read with the EMD and PSD2, impose no statutory trust over funds from e-money holders.³⁰³¹³²

Can a UK Authorised Payment Institution issue its own IBANs and access payment systems directly?

Direct clearing access is governed by the Bank of England Settlement Account policy, which outlines direct clearing criteria for non-bank payment service providers. For SEPA access, a Mambu guide details that becoming an indirect participant requires regulatory tasks, commercial selection of a sponsor bank, and technical integration.³³³⁴³⁵

Do you need your own Visa/Mastercard principal membership or is a BIN sponsor enough?

Visa and Mastercard Principal Members hold direct network connections and settlement risk, while associate members rely on a sponsoring Principal Member. An Enfuce analysis confirms BIN sponsorship suits companies prioritising rapid card product launch, speed, and lower operational complexity over direct licensing.³⁶³⁷

What is changing under the UK safeguarding reform (CASS 15) vs EU PSD3?

CASS 15 is the UK safeguarding reform: FCA PS25/12 and the Payments and Electronic Money (Safeguarding) Instrument 2025 (FCA 2025/38) bring CASS 15 into force on 7 May 2026. In the EU, the European Parliament and Council struck a political deal on the payment services package (PSD3 and PSR) on 27 November 2025.³²³⁸³⁹

Yes. Payment agents must be registered. PSRs 2017 Regulation 34 sets the registration requirements for payment agents on the FCA Register via Connect, and a payment institution acts through its registered agents.⁹⁴⁰

What it really takes

How much capital do you really need for a UK Authorised Payment Institution?

Initial capital under PSRs 2017 Schedule 3 Part 1 is €20,000 for money remittance, €50,000 for payment initiation, and €125,000 for services (a) to (e). Ongoing own funds are calculated using the methods in Schedule 3 Part 2 (Methods A, B and C). FCA guidance on preparing financial information advises providing 3 years of forecasts in Excel format as best practice.⁴¹⁴²

Who do you have to hire for a UK Authorised Payment Institution, and where must they be based?

Your firm must be a UK body corporate with its head office (and registered office, if any) in the UK, and carry on at least part of its payment service business in the UK. Directors and anyone responsible for managing the firm or its payment services must be of good repute with appropriate knowledge and experience.⁴³²⁵

Applications for a UK API licence must be filed in English. The FCA Connect portal terms and application procedures mandate submission in the English language, so documents go in through the portal in English.⁴²

The legal framework

The procedure under the law

How long it takes

How long does getting a UK Authorised Payment Institution licence really take?

Under PSRs 2017 Regulation 9, statutory decision limits are 3 months from receiving a complete application and 12 months from an incomplete submission. FCA Authorisations Operating Service Metrics (Q4 2025/26) record a median determination time of 207 calendar days (LQ: 124, UQ: 269 days) for payment services and e-money applications.⁴⁴⁴⁵

Under PSRs 2017 Regulation 9(1), the FCA must determine a complete application within 3 months of receipt. For incomplete submissions, Regulation 9(2) allows up to 12 months. The FCA notes that complete applications are more likely to be determined in line with its targets.⁴⁴⁵

Statutory: 3 months from receipt of a complete application, or 12 months from receipt of an incomplete application under Regulation 9 of PSRs 2017². Observed: Median elapsed determination time of 207 calendar days (Lower Quartile: 124 days, Upper Quartile: 269 days) across 44 cases (PS1-4 Payment Services & E-Money Authorisations) determined in Q4 2025/26⁵. The statutory clock usually starts only when the regulator treats the application as complete, and pauses while it waits for answers to its questions.

What it costs

What does a UK Authorised Payment Institution licence cost in total?

The FCA application fee for an API is set by FCA Handbook FEES 3 Annex 8 at Category 4 (services f to h) or Category 5 (services a to e). Ongoing periodic fees under FCA FEES 4 Annex 11R (Instrument FCA 2026/34) include a G.3 minimum fee of £628 plus a variable tariff on relevant income. The Payments and Electronic Money (Safeguarding) Instrument 2025 requires an independent annual audit under SUP 3A for balances over £100,000.²⁹⁴⁶³⁹

Approval odds and who can own it

What are the real approval odds for a UK API, and why do applications fail?

FCA official data records payment institution approved applications at 15% in 2024 and 20% in 2025, and EMI approvals at 40% to 45% in 2025. Under PSRs 2017 Regulation 9(3), applicants may voluntarily withdraw applications before formal determination.²⁵⁴⁴

Directors and persons responsible for management must be of good repute and have appropriate knowledge and experience, per PSRs 2017 Regulation 6(7)(b). On change of control, FSMA 2000 s.189 sets a 60 working-day assessment period starting the day the appropriate regulator acknowledges receipt of the section 178 notice.⁴³¹⁹

After you get the licence

Cryptoasset activity sits under a separate FCA route. The FCA's FSMA Part 4A authorisation gateway for cryptoasset firms runs from 30 September 2026 to 28 February 2027.⁴⁷⁴⁸⁹

Will a UK Authorised Payment Institution get a bank account and payment processing?

Banking access is not guaranteed. The FCA Approach Document Chapter 16 confirms banks have no absolute obligation to grant payment accounts to payment institutions, as access remains a commercial decision. Visa and Mastercard Principal Membership is a direct licence giving financial institutions ownership of BINs and direct settlement capabilities.⁹³⁶

The licence can be lost through inactivity. Under PSRs 2017 Regulation 10, the FCA can cancel authorisation if the business does not commence within 12 months or ceases for 6 months.⁴⁹³⁹

Yes. Under PSRs 2017 Regulation 9(9), the applicant can refer an FCA refusal or imposed requirement to the Upper Tribunal. The FCA Authorisation Refusal Process outlines Warning Notice representations and Decision Notice escalation pathways. Under Upper Tribunal Rules 2008 Rule 23(2), the notice of appeal must be received within 1 month.⁴⁴⁵⁰⁵¹

Under Regulation 10, the FCA may cancel authorisation if payment services do not commence within 12 months or cease for 6 months. Prior approval is required for qualifying holding changes crossing 10%, 20%, 30% or 50% under FSMA Part XII, and permission changes are made through Connect.⁴⁹¹⁹⁷

EMI, PI or a banking licence in the UK, which do you need?

Which licence you need depends on where your activity falls, and the FCA Perimeter Guidance Manual PERG 3A and PERG 15 define the activity perimeters for e-money versus payment institutions. Applications are made under FSMA 2000 Part 4A, Section 55A, which governs statutory applications for permission to carry on regulated financial activities.⁵²⁵³⁵⁴

Why won't UK clearing banks open a safeguarding account for a licensed payment institution?

There is no blanket refusal. The FCA Approach Document, Chapter 16, states that credit institutions assess each payment service provider's request for payment account access individually, without restricting whole categories of PSPs. The EBA Opinion on de-risking found that de-risking across the EU affects payment institutions and e-money institutions as customers of banks.⁹⁵⁵

Buying a company that already holds it

Prior approval required. Acquirers must obtain FCA approval prior to acquiring or increasing control in an FCA or PRA authorized firm; acquiring control without approval constitutes a criminal offence under FSMA 2000 Section 191F. For Directive firms (including banks, MiFID investment firms, UCITS Mancos, payment institutions, and electronic money institutions), control thresholds are 10%, 20%, 30%, and 50% of shares or voting rights, or becoming a parent undertaking. For non-Directive firms (such as non-MiFID investment firms, general insurance intermediaries, and full-scope AIFMs), a single 20% or more threshold applies. For cryptoasset firms under MLRs Schedule 6B (amended 30 June 2026), a 25% beneficial owner threshold applies, alongside FSMA bands if no beneficial owner exists. The statutory assessment period is 60 business days from complete notification acknowledgment (FSMA Section 189), pausable once for up to 30 business days if further information is requested.⁶

Ready-made companies holding this licence: see verified positions.

PI in other countries

Values come from each licence's page, where every figure has its source.

Laws behind it

• The Payment Services Regulations 2017: S.I. 2017/752