Introduction:
Cyprus, nestled in the eastern Mediterranean, is not only known for its rich history and stunning landscapes but also for its thriving economy. As the island nation continues to emerge as a key player in the global market, the role of Payment Service Providers (PSPs) has become increasingly significant.
In recent years, Cyprus has witnessed a surge in the demand for convenient and secure payment solutions. This growing trend can be attributed to several factors, including the rise of e-commerce, digitalization of businesses, and changing consumer preferences. In response to this demand, Payment Service Providers (PSPs) have emerged as key facilitators, offering a wide range of services to businesses and consumers alike.
The PSP in Cyprus is regulated by The Provision and Use of Payment Services and Access to Payment Systems Laws of 2018 to 2023 (the “Law“), which transposed into national law the provisions of Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market (also known as PSD2).
What is a PSP in Cyprus?
Under Article 2 of the Law, a PSP in Cyprus means any legal person that has been granted authorisation by the Central Bank of Cyprus (“CBC”) to offer any of the following services:
- Services enabling cash to be placed on a payment account as well as all the operations required for operating a payment account.
- Services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account.
- 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 payment transactions, when the funds are covered by a credit line for a payment service user:
- Issuing of payment instruments and/or acquiring of payment transactions.
- Money remittance.
- Payment initiation services.
- Account information services.
Yiorkas Law serves as your premier destination for comprehensive legal and compliance assistance concerning the Licensing of Payment Services Providers (PSPs). Our Team excel in guiding clients through the intricate landscape of PSP in Cyprus licensing regulations. We are dedicated to ensuring that your compliance needs are met with precision, safeguarding your interests every step of the way. With our expertise, you can confidently navigate the complexities of PSP licensing in Cyprus, allowing you to focus on your core objectives while remaining compliant with regulatory standards.
Licensing of PSP in Cyprus
In order to enhance the likelihood of success, it is imperative to establish a robust Plan of Action, encompassing, among other elements, the following key components.
Our esteemed Law Firm is well-positioned to offer thorough guidance and preparation concerning the requisite steps outlined below, integral to the Application process for obtaining PSP (Payment Service Provider) authorization in Cyprus, as regulated by the Central Bank of Cyprus.
Initial Capital Requirements:
20,000
for Money remittance service only
50,000
for Money initiation services
125,000
for any services which involve cash placement and withdrawals
350,000
if issuing and offering electronic money.
How We Start in 5 Simple Steps:
Important Note: Rest Assured that Yiorkas Law will guide you in detail through all the process of tha above Stages, as well as during the post License Supervision and Monitoring.
Application Preparation
14 Key Elements to prepare in advance:
- A program outlining the type of payment services planned.
- A Business Plan with a budget forecast for the first three financial years, demonstrating the ability to operate soundly.
- Evidence and Supporting Documentation of holding the initial capital required.
- Written measures for safeguarding payment service users' funds.
- Governance arrangements, internal control mechanisms, and administrative procedures.
- Procedures for monitoring, handling, and following up on security incidents and related complaints.
- Processes for filing, monitoring, tracking, and restricting access to sensitive payment data.
- Business continuity arrangements, including critical operations identification and contingency plans.
- Principles and definitions applied for collecting statistical data on performance, transactions, and fraud.
- Security Policy Document, risk assessment, and security control measures against identified risks.
- Internal Control Mechanisms for compliance with anti-money laundering and terrorist financing obligations.
- Structural organization description, including agent/branch use, checks, outsourcing, and participation in payment systems.
- Identification of qualifying holders, their holdings, and evidence of suitability for sound management.
- Identity and qualifications of directors and management personnel, as determined by CBC directives.
- Identification of statutory auditors and audit firms where applicable.
- Legal status and articles of association of the applicant.
- Head Office Address in the Republic of Cyprus.
Registration Fee:
Application Examination - EUR 5,000-:
Each applicant company shall pay the amount of five thousand (5,000) euros at the time of submitting its application to the CBC for obtaining an authorisation to operate as a PSP.
Crypto Asset Service Provider (CASP): Focus on 3 Key Elements to Obtain your License.
Alexios Yiorkas
- March 01, 2024