Financial Institutions in Malta - PSPs and EMIs

Updated: June 25, 2020 | 4 minute read

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PSPs or Payment Service Providers as well as EMIs or Electronic Money Institutions are regulated by the Financial Institutions Act (CAP.376), that transposes the Second Payment Services Directive (PSD2).

A. Payment Services and Issuing Electronic Money

The following payment services are licensable and can be carried out in or from Malta by by Financial Institutions once a license is obtained from the Malta Financial Services Authority (MFSA):

  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:

    1. execution of direct debits, including one-off direct debits;

    2. execution of payment transactions through a payment card or a similar device; and

    3. execution of credit transfers, including standing orders. 

  4. Execution of payment transactions where the funds are covered by a credit line for a payment service user:

    1. execution of direct debits, including one-off direct debits;

    2. execution of payment transactions through a payment card or a similar device; and

    3. execution of credit transfers, including standing orders. 

  5. Issuing of payment instruments and, or acquiring of payment transactions instruments;

  6. Money remittance;

  7. Payment initiation services;

  8. Account information services

The issuing of electronic money  may also be carried out in or from Mala once a license is obtained from the MFSA:

Electronic money is considered to be electronically,  including magnetically, stored monetary value as represented by a claim on the issuer which is issued on  receipt of funds for the purpose of  making  payment  transactions  and  that  is  accepted  by  a person  other  than  the  financial  institutions  that  issued  the electronic money.

It is important to note that a company may apply for authorization to be a PSP and an EMI.

B. Licensing and Registration 

The application has various components to it which shall be targeted simultaneously by our specialized team according to your requirements.

The application is composed of the following components:

  1. Submission of application forms;

  2. A programme of operations;

  3. A business plan;

  4. A document outlining safeguarding arrangements of the company;

  5. A document outlining the governance arrangements and internal control mechanisms of the company;

  6. A security incidents policy document;

  7. A sensitive payment data policy;

  8. A business continuity plan;

  9. A statistical data policy;

  10. A security policy;

  11. An AML/CFT policy;

  12. Supporting documentation pertaining to the company and its organisation.

Once the licensing procedure is completed and a license is issued, you will be in a position to start providing the respective payment services in or from Malta. It is important that no licensable activity is carried out prior to the license being issued. As your local partner, we shall be happy to provide any accounting, audit, legal, local IT set-up or any other service or introduction you might require for your local business. 

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 C. Initial Capital Requirements

PSPs licensed to carry out the above-listed activities are subject to the following initial capital requirements:

  1. Where the institution only provides money remittance, its capital shall at no time be less than €20,000

  2. Where the institution provides services related to the execution of payment transactions where the consent of the payer to a payment transaction is transmitted by means of any telecommunication, digital or IT device and the payment is made to the telecommunication, IT system or network operator, acting solely as an intermediary on behalf of the payment service user and the supplier of the goods and services, its capital shall at no time be less than €50,000; and

  3. Where the institution provides any other service, its capital shall at no time be less than €125,000.

EMIs licensed to issue electronic money must have a minimum initial share capital of €350,000.

 D. Statutory Costs

  1. Application with the Malta Financial Services Authority (MFSA) - A company applying for a PSP or EMI license with the MFSA must, together with the application, pay a non-refundable fee of €3,500 as an application and processing fee. Moreover, an annual supervision fee payable to the MFSA amounting to 0.0002% of the total assets as reported in the statutory schedules by the PSP/EMI  in the previous year, subject to a minimum annual amount of €2,500; and

  2. Registry of Companies Fees. 

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