Payment Service Provider (PSP) & Electronic Money Institution (EMI) – CBC
What is CBC and what does it do?
The Central Bank of Cyprus (CBC) is the ultimate governing body responsible for the authorisation and regulation of Payment Services Institutions in the Republic. CBC acts as the government’s banker, and its mandate is to supervise credit and payment institutions. CBC’s main objective is to shield the stability of the financial system, promote, regulate, and oversee the smooth operation of payment and settlement systems.
Why establish a Payment Service Firm in Cyprus?
An established Payment Service Provider (PSP) or an Electronic Money Institution (EMI) in Cyprus benefits from:
- Cyprus’ attractive tax regime is one of the lowest among the EU member states and includes more than 60 double tax treaties.
- A cost-efficient plan of administrative, operating, and living expenses.
- Cyprus’s proximity to 3 continents.
- Providing its services across the EU, through the EU passporting framework, without seeking additional authorisation or establishing a branch in another member state.
- Cyprus’s unique combination of memberships (e.g. European Union, Eurozone, Council of Europe, United Nations, World Bank, World Trade Organisation, International Monetary Fund, British Commonwealth).
What are the services of Payment Service Firms?
| Type of Payment Service Firm | Included services |
|---|---|
| PSP Services | 1. Services enabling cash to be placed on a payment account as well as all the operations required for operating a payment account. 2. Services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account. 3. Execution of payment transactions, including transfers of funds on a payment account with the user’s payment service provider or with another payment service provider: - execution of direct debits, including one-off direct debits, - execution of payment transactions through a payment card or similar device, - execution of credit transfers, including standing orders. 4. Execution of payment transactions, when the funds are covered by a credit line for a payment service user: - execution of direct debits, including one-off direct debits, - execution of payment transactions through a payment card or a similar device, - execution of credit transfers, including standing orders. 5. Issuing of payment instruments and/or acquiring of payment transactions. 6. Money remittance. 7. Payment initiation services. 8. Account information services. |
| EMI Services | All of the services stated above and in addition: 1. Issuance and administration of electronic money. |
In this regard, electronic money is defined as a monetary value represented by a claim on the issuer which is:
- stored electronically, including magnetically;
- issued on receipt of funds to make payment transactions;
- accepted by a natural or legal person other than the electronic money issuer.
Initial Capital Requirements
| Type of Service | Initial Capital Requirements |
|---|---|
| Money Remittance Service Only | €20,000 |
| Payment Initiation Services Only | €50,000 |
| Any Payment Services stated in points 1-5 above | €125,000 |
| Issuing and Offering Electronic Money | €350,000 |
Application Fees
The application fee payable to the Central Bank of Cyprus, for the examination of the application for acquiring an EMI or a PSP license, is 5,000 EUR. Where a PSP institution applies only for getting registered in the register for account information services, or intending to do so, the amount of 500 EUR shall be paid at the time of submission.
Licensing Timeframe
Typically, the completion of the application process is estimated between 9 to 12 months. However, this duration depends on the completeness and quality of the information provided, as well as the applicant’s ability to present a well-defined business plan. Based on the CBC’s workload and time taken for responses to additional information requests, we recommend our clients to budget for 12 to 18 months.
Obtaining a Payment Service Firm license with SALVUS
The SALVUS Payment Services Licensing team, comprised of industry-leading experts, stands ready to assist you in obtaining the most appropriate PSP or EMI license by employing a project management approach. We support you throughout the entire licensing process by acting as a reliable link between the supervisory authority, CBC, and your applying Payment Service Institution.
Once your PSP or EMI license has been successfully granted, our Regulatory Compliance team is determined to guide you in meeting all your regulatory and reporting obligations.
Please contact us at info@salvusfunds.com if you are interested in establishing a Payment Service Provider or an Electronic Money Institution in Cyprus; we look forward to working together and being of value.
