SPI license: how to prepare for the regulator’s inspection and get a positive decision

SPI is an organization classified as a small payment service provider, which has received a license in the territory of a particular jurisdiction and has become officially confirmed; this is a convenient and profitable solution for entrepreneurs planning to operate on a larger scale in advance to check their technical solutions and the demand for services on a regulated and controlled financial market of the selected commercial space. This form of providing payment services can be recommended, for example, for various startups from the FinTech industry. After checking your capabilities, SPI-license can always be extended to an API (authorized payment institution) and gain the right to provide payment services throughout the EU, USA, Asia and other global markets. Below we’ll get a closer look at compliance review for SPI license and other peculiarities. 

Our company is highly qualified specialized specialists in obtaining various types of permits for commercial activities. We work all over the world and cooperate with cases of any complexity. We are also ready to offer you options for a ready-made SPI license for sale in the Czech Republic, Germany, Denmark and other countries.

Introduction to SPI License: Understanding Regulator Expectations for SPIs and Other Peculiarities

Entrepreneurs have the option of obtaining permission on their own or purchasing a structure that is already ready and put on the market. SPI with software integration and a valid bank account (for the purchase of a ready-made organization, the new owner also gets access to a commercial account) will be able to provide the following set of services:

• accept and issue cash from a payment account;
• perform actions necessary to maintain an account;
• make transfers to bank accounts in various ways;

According to SPI regulatory compliance, SPIs have transaction limits depending on the selected jurisdiction. On average, the monthly amount of payment transactions should not exceed 3,000,000 euros. However, each country and each regulatory authority sets its own conditions. In addition, it should be noted that a client can store on average no more than 2,000 euros in the accounts of one SPI (however, at this point it should also be remembered that everything depends on the specific market space chosen).

Internal Compliance and Training for SPI License Inspection: Requirements Correspondence

SPI is a prerequisite for activities in the financial segment of the market. Usually this is a business associated with electronic money. Recently, SPI has been especially gaining popularity for startups in this field. So, as we have already mentioned, having such a license, an enterprise can carry out the following.

1. Accept and send payments to clients.
2. Exchange money.
3. Processing of money orders and transfer of funds on behalf of third parties.
4. Open accounts for clients and service them.
5. Make money transfers without opening an account.

But to get positive decision for SPI license, you must fulfill a number of requirements, starting with company registration and ending with providing a legal address. Doing this on your own is risky; in this case, it’s easier to turn to us for help.

The main difficulty in licensing financial activities is that each country is unique in terms of regulating this type of procedure. The specifics of legislation, the features of the operation of by-laws and the principles of their application in practice in each jurisdiction are their own.

Despite the variety of rules for licensing financial activities in different jurisdictions, most of them put forward generally quite similar SPI requirements for licensees regarding next-mentioned aspects.

1. Minimum amount of authorized capital. Usually it is measured in several thousand dollars or euros, as we already gave as an example above.
2. Mandatory staff positions. Most often, the positions of managers, auditors, security specialists, etc. are regulated.
3. Personalities of managers and responsible employees. Requirements for absence of criminal record and bankruptcy are often put forward.
4. Payment of mandatory duties. As a rule, not only a one-time fee is charged when filing an application, but also an annual one.
5. Territory of the enterprise. A permit is almost always issued with the condition that the enterprise’s activities will be carried out, including or primarily, in the territory of the jurisdiction.
6. Residence. Some jurisdictions impose restrictions on the residency of the licensee enterprise or its management.
7. The specific requirements put forward within these criteria are unique to each country. Accordingly, you should choose the jurisdiction for establishing a brokerage company and obtaining the appropriate license with the utmost caution.

The issuance of licenses for payment activities, as a rule, is carried out by special government agencies (in rare cases, special non-governmental organizations) vested with appropriate powers. Procedure for licensing payment activities is quite complex, since the potential licensee must prove his ability to work in such a complex and serious area.

Often, the regulator requires the personal presence of the management and owners of applicant companies when undergoing certain licensing procedures. In some countries, officials even personally check the level of professional competence of responsible representatives of licensee companies.

1. You can also add a few words about the benefits of running an SPI-business.
2. The ability to seamlessly provide payment services within a particular market space.
3. If we are talking about a ready-made option, then this is the availability of prepared and legalized internal AML/CFT documentation.
4. Opportunity to gain access to a global market and a wider audience of consumers.

Who may need a SPI-license:

• startups launching a fintech project;
• entrepreneurs with their own payment system;
• businessmen opening currency exchange offices;
• representatives of the e-commerce sector.

SPI License Inspection Checklist: Strategies for Demonstrating Compliance and Readiness

In order to demonstrate their full readiness to obtain this type of permit and conduct such a business, entrepreneurs need to take the following steps.

1. Preparation of documents for company registration.
2. Registration of a company in the chosen jurisdiction, including substance and hiring a local secretary.
3. Development of a business-plan; passing AML/KYC policies and procedures.
4. Obtaining LEI numbers.
5. Opening a corporate bank account.
6. Installation of banking software from third party service providers with testing and integration if necessary. Direct submission of an application for licensing the financial activities of a company.

The general list of documents is similar among regulators, however, it should be remembered that the list may differ depending on the selected market space. In frame of SPI license documents preparation, next-mentioned must be submitted to the regulatory authority:

• statement of desire to obtain an SPI license;
• certificate of the institution’s activities;
• individual profiles of founders;
• agreements between the founders;
• certificate of contribution to the authorized capital from each founder;
• declaration of conformity.

The state duty is paid separately in the amount established by the state. This is not a fee for issuing a license, but for reviewing an application; as a rule, money will not be returned even in case of refusal.

Our company is ready to provide you with comprehensive assistance in obtaining SPI license. We will accompany you at every stage and lend our reliable professional shoulder. Contact us and you will be able to successfully start operating in this sector in the shortest possible time.

Article’s author is Denys Chernyshov – founder and CEO of the globally-famous organization Eternity Law International.