The application process for obtaining a PI license in Cyprus consists of the following steps:
- Prepare a comprehensive application package, including all required documentation and information, as specified in the CBC’s Directive on the Authorisation and Supervision of Payment Institutions.
- Submit the application package to the CBC, along with the non-refundable application fee.
- The CBC will review the application and may request additional information or clarification as necessary.
- If the CBC deems the application complete and satisfactory, it will grant a PI license, subject to the fulfilment of any conditions it may impose.
- The applicant must pay the annual license fee and fulfil any conditions imposed by the CBC within three months of the license being granted.
Ongoing Compliance and Supervision
Once a PI license is obtained, the licensee must comply with ongoing regulatory requirements, including:
- Submitting periodic reports to the CBC, including financial statements and information on the PI’s risk management, AML and CTF measures
- Ensuring continuous compliance with the minimum capital requirements
- Notifying the CBC of any significant changes to the PI’s governance, management, or business operations
- Cooperating with the CBC’s supervision and inspection activities
A Payment Institution (PI) and an Electronic Money Institution (EMI) are both regulated financial entities within the European Union, but they differ in the scope of services they can offer.
Payment Institution (PI) Services:
A Payment Institution (PI) is primarily focused on providing payment services, which can include:
- Execution of payment transactions, including credit transfers and direct debits.
- Money remittance services, facilitating the transfer of funds between individuals or businesses.
- Payment initiation services, enabling the initiation of a payment order on behalf of the payer with the payer’s account-holding payment service provider.
- Account information services, providing consolidated information on payment accounts held by a payment service user with different payment service providers.
- Foreign exchange services related to payment services.
- Ancillary services, such as operational and technical support for payment services or activities.
Electronic Money Institution (EMI) Services:
An Electronic Money Institution (EMI), on the other hand, is authorised to issue electronic money (e-money) in addition to providing payment services. E-money is a digital representation of fiat currency stored electronically, usually on an electronic device or through an online platform. EMI services include:
- Issuance, distribution and redemption of electronic money.
- Execution of payment transactions using electronic money, including credit transfers and direct debits.
- Issuing and acquiring payment instruments linked to electronic money, such as e-wallets and prepaid cards.
- Money remittance services using electronic money.
- Payment initiation services and account information services, similar to PIs.
- Foreign exchange services related to electronic money services.
- Ancillary services related to the issuance and management of electronic money.
The main difference between a PI and an EMI lies in the ability to issue electronic money. While both entities can provide payment services, only EMIs are allowed to issue, distribute and redeem electronic money. This allows EMIs to offer additional services related to e-money, such as prepaid cards and e-wallets, which can be used for online and offline transactions.
Chambers & Co, is dedicated to assisting companies in obtaining a Payment Institution license in Cyprus. We offer a comprehensive range of services to ensure a smooth and successful application process, including:
- Guidance on the regulatory framework and eligibility criteria for PIs in Cyprus.
- Assistance in the formation of the legal entity and corporate structure.
- Preparation of the application package, including the business plan, governance structure and risk management policies.
- Liaising with the Central Bank of Cyprus and addressing any queries or concerns during the application process.
- Guidance on the ongoing compliance and reporting requirements for licensed PIs.
- Legal and regulatory advice on expanding your PI business within the European Union.
Our team of experienced legal and financial professionals at Chambers & Co is committed to providing personalised and efficient support throughout the licensing process. By leveraging our expertise and extensive knowledge of the Cypriot financial services sector, we can help your company successfully navigate the complex regulatory landscape and obtain a Payment Institution license in Cyprus.