An FCA payment institution (PI) or electronic money institution (EMI) licence costs far more than the regulator's application fee. A realistic budget has three different kinds of money in it: fees the firm pays and does not get back, operating costs it spends to build and run the business, and regulatory capital it keeps inside the company. Treating these as one number either overstates or understates what a founder needs to raise.
The tables below set out the regulator-set figures for each licence type. Every fee is taken from the FCA's application fees page (updated 13 July 2026) and the FCA's final fee rates for 2026/27 (PS26/14, published 2 July 2026). Capital figures come from the Payment Services Regulations 2017 (PSRs) and the Electronic Money Regulations 2011 (EMRs) and are set in euros.
| Cost item | Authorised PI (API) | Authorised EMI |
|---|---|---|
| FCA application fee | £2,820 or £5,640 | £5,640 |
| Initial capital | €20,000, €50,000 or €125,000 | €350,000 |
| Ongoing capital | Higher of initial capital and Method A, B or C | Higher of €350,000 and Method D, plus A, B or C for unrelated payments |
| FCA periodic fee 2026/27 | £628 minimum, plus £0.309 per £1,000 of relevant income above £100,000 | £2,063 minimum, plus £43.40 per £1m of average outstanding e-money above £5m |
| Annual safeguarding audit | Required above the exemption threshold | Required above the exemption threshold |
| Cost item | Small PI (SPI) | Small EMI |
|---|---|---|
| FCA application fee | £1,130 | £1,130 |
| Initial capital | None | None below €500,000 average outstanding e-money, then 2% |
| FCA periodic fee 2026/27 | £652 flat | £1,432 flat |
| Annual safeguarding audit | Not required; voluntary audit encouraged | Required above the exemption threshold |
A registered account information service provider (RAISP) also pays a £1,130 application fee and needs professional indemnity insurance in place of initial capital. A variation of permission to add services costs £1,410 or £565, which is half of the Category 4 or Category 3 fee; there is no fee to remove services.
The FCA groups application fees into numbered categories. An authorised payment institution falls into Category 4 or Category 5, depending on the payment services it applies for. The services are listed as paragraphs (a) to (h) of Schedule 1 to the PSRs.
| Payment services applied for | Fee category | Fee |
|---|---|---|
| Any of paragraphs (a) to (e): cash placement and withdrawal, executing transfers, credit-linked transfers, card issuing and merchant acquiring | Category 5 | £5,640 |
| Only paragraphs (f) to (h): money remittance, payment initiation, account information | Category 4 | £2,820 |
An application that combines services from both groups pays the higher fee. The fee is paid through the FCA's Connect system when the application is submitted, it is non-refundable whatever the outcome, and the FCA returns an application without assessing it if the correct fee has not been paid. Earlier figures of £2,790 and £5,580 are out of date.
An authorised EMI falls into Category 5 and pays £5,640. Applying for payment services alongside e-money issuance does not increase the fee, because the payment services are covered by the same authorisation, but each service must still be described, resourced and supported by policies in the application.
The fee is separate from the €350,000 initial capital and is the smallest of the regulator-set costs. Paying it does not reserve a place or start the statutory clock on an incomplete file. The full EMI procedure, from documents to case officer questions, is set out in our UK EMI licence guide.
A small payment institution, a small EMI and a registered account information service provider all fall into Category 3 and pay £1,130. These routes cost less at the outset, but they are registrations with limits, and they suit a business whose plan sits within those limits for several years.
A small firm that outgrows its limits applies for authorisation as a new application, with the full fee, capital and assessment. Choosing small status when the plan shows rapid growth usually means paying for two applications within a short period.
Initial capital is the minimum level of the firm's own funds it must hold before authorisation. For an API it depends on the payment services, under Schedule 3 to the PSRs.
| Payment services | Initial capital |
|---|---|
| Money remittance only | €20,000 |
| Payment initiation services | €50,000 |
| Any of paragraphs (a) to (e) | €125,000 |
| Account information services only | None; professional indemnity insurance instead |
Where a firm applies for several services, the highest applicable figure applies; the amounts are not added together. A firm offering money remittance and merchant acquiring needs €125,000, not €145,000. Because the figures are set in euros, the sterling amount moves with the exchange rate, so firms hold a margin above the minimum on the day the capital is evidenced.
An authorised EMI must hold initial capital of at least €350,000 (EMRs Schedule 2, paragraph 2), evidenced before authorisation. The FCA may accept final evidence of the capital later in the assessment, before the decision is made.
Payment services related to issuing e-money do not add to the €350,000. Payment services that are not related to e-money do not change the initial capital either, but they add to the ongoing own funds requirement once the firm is trading. Because the ongoing requirement grows with outstanding e-money, the business plan should model capital for the forecast period, not only for the day of authorisation.
Capital stays inside the authorised company as an asset on its balance sheet. It is not paid to the FCA and it is not spent. It must, however, meet four conditions:
Capital can be used to pay running costs only to the extent the company stays above its requirement at all times. In practice founders raise capital for the requirement and separate working capital for salaries, suppliers and launch, and they do not count the same money twice.
After authorisation, an API must hold own funds at least equal to the higher of its initial capital and an ongoing figure calculated under Method A, B or C of Schedule 3 to the PSRs. The FCA tells the firm which method applies and can direct it to hold up to 20% more or less than the result.
| Method | Basis of the calculation |
|---|---|
| Method A | 10% of the previous year's fixed overheads |
| Method B | Monthly payment volume in bands: 4% of the first €5m, 2.5% of the next €5m, 1% of the next €90m, 0.5% of the next €150m and 0.25% above that, multiplied by a scaling factor |
| Method C | A relevant indicator made up of interest income, fees and commissions and other operating income, in bands from 10% down to 1.5%, multiplied by a scaling factor |
An API providing transfers and card issuing processes an average of €8m of payment transactions a month. The calculation is 4% of €5m (€200,000) plus 2.5% of €3m (€75,000), giving €275,000, with a scaling factor of 1 for these services. The firm's requirement is €275,000, because it is higher than the €125,000 initial capital. A money remittance firm with the same volume applies a scaling factor of 0.5 and needs €137,500.
The point for budgeting is that growth raises capital. A firm that plans to scale volumes should show in its forecasts when it will need to inject further capital and where it will come from.
For e-money issuance, an authorised EMI calculates its ongoing requirement under Method D: 2% of average outstanding e-money. Average outstanding e-money is the average of the e-money in issue at the end of each day over the preceding six calendar months. The firm holds the higher of €350,000 and the Method D figure.
| Average outstanding e-money | Method D at 2% | Own funds required |
|---|---|---|
| €5m | €100,000 | €350,000 |
| €17.5m | €350,000 | €350,000 |
| €25m | €500,000 | €500,000 |
| €50m | €1m | €1m |
The Method D requirement passes the €350,000 floor at €17.5m of average outstanding e-money. Where the EMI also provides payment services not linked to e-money, the FCA adds a requirement under Method A, B or C for those services.
A small EMI needs no initial capital while its average outstanding e-money stays below €500,000. Once it reaches or is projected to reach €500,000, it must hold capital of at least 2% of its average outstanding e-money (EMRs Schedule 2, paragraph 3). At the €5m ceiling that is €100,000. A small PI has no initial capital requirement.
After authorisation, the FCA charges an annual periodic fee to fund its supervision. Each type of firm sits in a fee block, and the fee depends on a measure of its size. The FCA publishes final rates each summer; the 2026/27 rates were set in PS26/14 on 2 July 2026.
| Fee block | Firm type | 2026/27 periodic fee |
|---|---|---|
| G.3 | Authorised payment institutions | £628 minimum, plus £0.309 per £1,000 of relevant income above £100,000 |
| G.4 | Small payment institutions | £652 flat |
| G.10 | Authorised EMIs | £2,063 minimum, plus £43.40 per £1m of average outstanding e-money above £5m |
| G.11 | Small EMIs | £1,432 flat |
An authorised EMI with £25m of average outstanding e-money pays the £2,063 minimum plus 20 times £43.40 (£868), a periodic fee of £2,931 for 2026/27. In its first year, a newly authorised firm pays a proportion of the annual fee based on the months remaining in the fee year.
Firms also pay the Financial Ombudsman Service general levy, which is a small amount for most payment and e-money firms, and any case fees for complaints referred to the Ombudsman. The periodic fee is rarely the largest operating cost, but it belongs in every forecast.
The largest cost before submission is usually the work of preparing the application. It depends on the permissions sought, the complexity of the model, how much of the compliance framework already exists and how much support the firm needs. A full application covers:
The FCA reads these documents against each other. A forecast that assumes a different customer base from the business plan, or a safeguarding procedure that names a different bank from the programme of operations, generates questions that lengthen the assessment. Consistency is what the professional work buys.
The FCA expects governance in proportion to the size and complexity of the business. A board of one director with an outsourced policy set does not meet that standard for an authorised firm. The usual leadership team for an API or EMI includes:
These are salaries the firm pays from before authorisation, because the FCA assesses the people at application stage and expects them to be in post or committed. They are ongoing costs and belong in the forecasts for the whole period, not only the launch year.
In a small firm the compliance officer and MLRO roles can sit with one person, provided that person has the time and experience for both. Compliance monitoring, internal audit and parts of financial crime operations, such as screening alert review, can be outsourced to specialist providers. The MLRO role itself, and the board's responsibility for the business, stay inside the firm. The FCA looks at whether each person named has enough time for the role, so a director who holds several other positions is asked to explain how they will divide their time.
As customers and volumes grow, the firm adds financial crime analysts, a dedicated compliance team, customer support trained in complaints handling and vulnerable customers, and finance staff for regulatory reporting. The forecasts in the application should show when each hire is made, because the FCA compares planned growth with planned resourcing.
Safeguarding protects customer money so it can be returned in full if the firm becomes insolvent. The FCA's CASS 15 rules, introduced by Policy Statement PS25/12, came into force on 7 May 2026, and they turned safeguarding into a set of daily, monthly and annual obligations with real running costs:
| Method | How it works | Cost considerations |
|---|---|---|
| Segregation in a safeguarding account | Customer funds held in a designated account at a bank, or invested in secure low-risk assets | Bank account fees, reconciliation tooling and staff time; the usual choice |
| Insurance or comparable guarantee | An insurer or bank guarantees the funds if the firm becomes insolvent | Premium set by the provider; rarely offered to new firms |
The cost rises with the number of currencies, banks and payment flows the firm runs, because each one needs its own reconciliation. Firms that receive funds through card acquirers or agents also reconcile amounts in transit. Automating the reconciliation and the monthly return from the start keeps the cost proportionate as volumes grow.
Banks set their own fees for safeguarding accounts, and there is no regulated price. Opening a safeguarding account can take as long as the application itself, so it starts early. The annual audit applies to authorised PIs, authorised EMIs and small EMIs; a firm that has not been required to safeguard more than £100,000 at any time over at least 53 weeks is exempt, and small PIs are encouraged to arrange one voluntarily. Our article on the CASS 15 safeguarding regime explains each obligation. Safeheld, the firm's own safeguarding platform, runs the daily reconciliation and the monthly return.
An FCA licence does not come with a bank account, card scheme access, IBANs or payment rails. Each provider runs its own due diligence and sets its own commercial terms. The infrastructure a typical PI or EMI needs includes:
Commercial terms can include set-up fees, minimum monthly commitments, per-transaction charges, collateral reserves and prefunding. Prefunding and reserves tie up cash in the same way capital does, so the forecast shows them separately from operating spend.
There is no requirement to build technology in-house. Most new PIs and EMIs license a core platform and add specialist tools. Outsourcing does not transfer regulatory responsibility, so the firm still carries out supplier due diligence, signs written contracts with audit and exit rights, oversees performance and plans for continuity if a supplier stops.
| Approach | Suits | Cost profile |
|---|---|---|
| White-label platform | New firms launching a standard wallet, card or transfer product | Lower set-up cost, ongoing licence and per-transaction fees |
| Licensed core plus own front end | Firms that want their own customer experience | Moderate set-up cost, platform fees plus an in-house product team |
| Own build | Firms with a distinctive model and an experienced engineering team | Highest set-up cost and longest build; lower per-transaction cost at scale |
Cost follows product complexity. A single-currency transfer service needs far less than a multi-currency EMI with cards, FX, APIs for business customers and merchant acquiring. Whatever the product, the budget covers the regulatory functions as well as the customer-facing ones: transaction monitoring, sanctions screening, reconciliations, regulatory reporting, complaints handling, fraud controls and management information for the board.
The FCA expects financial crime controls proportionate to the customers, products and countries the firm serves. Those controls include customer identification and verification, sanctions and politically exposed person screening, transaction monitoring, fraud prevention, case management and suspicious activity reporting to the National Crime Agency.
| Control | What it covers |
|---|---|
| Identity verification | Document and biometric checks at onboarding, and business verification for corporate customers |
| Screening | Sanctions, politically exposed persons and adverse media, at onboarding and on an ongoing basis |
| Transaction monitoring | Rules and models that flag unusual payments for review |
| Fraud prevention | Device, behaviour and payment checks, including authorised push payment fraud controls |
| Case management | Recording investigations, decisions and suspicious activity reports |
Software is only part of the cost. Alerts need people to investigate them, higher-risk customers need enhanced due diligence, and the MLRO needs the time and team to oversee the framework and report to the board. A budget that funds the screening tools but not the analysts understates both the readiness the FCA expects at application and the cost of running the firm.
Firms providing payment initiation or account information services must hold professional indemnity insurance or a comparable guarantee. The minimum cover is calculated using the method in the FCA's Approach Document, and the policy must meet those terms; a general professional liability policy is not enough on its own.
Premiums are set by insurers, and new firms without trading history may receive fewer quotes. Firms identify their insurance needs early, because the application includes evidence of cover. Firms that safeguard through insurance rather than a segregated account also need a policy that meets the safeguarding rules, which is rarely available in the market.
Authorised firms submit a regular cycle of returns, including capital returns, the payments fraud report, the operational and security risk report, the monthly safeguarding return and event-driven notifications. Small firms have a lighter set. Each return needs accurate data from the firm's systems, reviewed before submission.
| Return | Who submits it | Frequency |
|---|---|---|
| REP017 payments fraud report | Authorised PIs and authorised EMIs | Every 6 months |
| REP017 payments fraud report | Small PIs, small EMIs and RAISPs | Every 12 months |
| REP018 operational and security risk report | All payment service providers | At least once a year |
| FIN060 EMI return | Authorised EMIs | Periodic, as set in SUP 16 |
| FIN060b annual return | Small EMIs | Annually |
| FSA057 transactions report | Small PIs | Before the end of each January |
| Safeguarding return | Firms that safeguard under CASS 15 | Monthly |
| Payment services and e-money complaints report | All payment service providers | Periodic |
Firms that compile returns by hand from disconnected systems spend more on reporting as they grow and have a higher chance of errors. Building reporting into the core platform from launch keeps the cost flat as volumes rise. Our guide to FCA regulatory reporting for payment and e-money firms lists every return. The statutory audit of the annual accounts and the annual safeguarding audit are separate engagements, priced by the auditor.
There is no single figure. Two firms applying for the same licence can have very different budgets because of their products, volumes, team and suppliers. A realistic pre-launch budget covers six areas:
| Area | What it includes |
|---|---|
| FCA application fee | £1,130 to £5,640, non-refundable |
| Regulatory capital | €20,000 to €350,000 initially, retained in the company |
| Professional support | Application preparation, legal and corporate work |
| Management and compliance | Salaries from before authorisation |
| Technology and infrastructure | Platform, screening, banking, cards, prefunding |
| Working capital | Running costs through the assessment and early trading |
Working capital often matters as much as regulatory capital. An EMI that holds exactly €350,000 can still lack the cash to pay salaries, suppliers and advisers while its application is assessed. The FCA reviews whether the firm is funded for the forecast period, not only whether it meets the capital minimum.
Take an illustrative EMI whose leadership team, office, platform and advisers cost £60,000 a month from the start of preparation. If preparation takes four months and the assessment eight, the firm spends £720,000 before it can take its first customer, on top of the €350,000 it must keep as capital. If revenue then takes six months to cover running costs, the founders need funding for a further period of losses. The FCA expects the forecasts to show this funding in place, with a downside case.
Costs arrive in stages, and the funding plan follows the same sequence. Committing spend before it is needed ties up cash; committing it too late lengthens the assessment.
| Stage | Costs that fall due |
|---|---|
| Preparation | Company formation, application preparation, first leadership hires, supplier selection |
| Submission | FCA application fee; initial capital deposited or committed; office in place |
| Assessment | Salaries, supplier contracts, safeguarding and operating account onboarding, answers to FCA questions |
| Authorisation | Pro-rated FCA periodic fee and levies; platform go-live; card sponsor and scheme fees; prefunding |
| First year of trading | Full staffing, monitoring and screening, monthly safeguarding returns, safeguarding and statutory audits, further capital as volumes grow |
The pre-authorisation stages carry cost with no revenue, which is why founders who plan for the full assessment period, rather than the three-month statutory figure, raise the right amount the first time.
Application support is offered at very different scopes, and comparing prices is only meaningful when the scope is the same. A document set is one part of the work. A complete project also covers:
Documents that do not match the real business create inconsistencies the case officer will ask about. Whoever prepares the application, the FCA expects the policies to be written for the applicant's own model rather than taken from a template.
There is no legal requirement to use an adviser. Firms can prepare and submit their own application through Connect, and the FCA's pre-application support service offers meetings to some applicants. The main contact on the application must be an individual at the firm in either case.
The standard the FCA applies does not change. The saving depends on in-house expertise: a team that has run a PI or EMI before can prepare much of the file itself, while founders new to the regime spend significant time learning it and often rewrite documents after the first round of questions. Time is a cost too, because salaries and suppliers run throughout the assessment.
Acquiring an authorised firm replaces the application with a purchase price and the cost of legal, regulatory and financial due diligence. The buyer must obtain FCA approval for the change in control before completion; under section 189 of the Financial Services and Markets Act 2000 the FCA has 60 working days from a complete notice to decide, and the period can be paused while it asks for further information.
The buyer also inherits the firm's history, systems and weaknesses. A low-priced firm with gaps in safeguarding or financial crime controls can cost more to remediate than a new application, and planned changes to the business model or management add further FCA work. Our guide to FCA change of control applications covers the process.
The FCA must decide a complete application within three months and any application within twelve months. The firm plans API and EMI applications at 6 to 8 months from submission, and the budget should cover that period. Our guide to FCA PI and EMI timelines sets out each stage.
An EMI budget starts with the £5,640 fee and the €350,000 initial capital, and then adds the larger costs of an e-money product: wallets and cards, the core platform, scheme sponsorship, banking, safeguarding, financial crime controls and the leadership team. The plan keeps regulatory own funds and operational working capital in separate lines.
The model then projects average outstanding e-money and any unrelated payment volumes month by month, so the board can see when the Method D requirement will pass €350,000 and when further capital will be needed. An EMI planning to hold £25m or more of customer balances should expect its capital requirement, its periodic fee and its safeguarding costs all to rise with that growth.
A complete budget runs from the start of preparation to the end of the first full year of trading:
Two questions decide the budget. The first is what it costs to obtain the licence. The second, and usually the larger, is what it costs to build and sustain a business that meets the FCA's standards once authorised.
A small PI or small EMI that outgrows its limits does not vary its registration; it applies for authorisation. That means a second application fee of £2,820 or £5,640, the full initial capital of €125,000 or €350,000, an expanded leadership team and a full FCA assessment. The firm keeps trading under its registration while the application is assessed, but it must stay within the small limits until it is authorised.
For a business whose plan shows growth past the limits within two to three years, applying for full authorisation from the outset usually costs less overall than two applications. For a business that will stay small, or that needs to test a product first, registration is the lower-cost start.
UK firms lost EU passporting rights on 31 December 2020. A UK PI or EMI that wants to serve customers in the European Economic Area needs a separate entity authorised in an EU member state, with its own initial capital, local management, application fee and supervision. The EU minimum capital figures mirror the UK ones: €350,000 for an EMI and €20,000 to €125,000 for a PI, depending on services.
Groups that plan to serve both markets budget for two licensed entities from the start and choose the EU country on the basis of the regulator's approach, local substance requirements and the time it takes to decide applications. Running two entities also doubles a large part of the safeguarding, reporting and audit cost.
Buckingham Capital Consulting has worked on payment and e-money authorisations since 2013. It obtained FCA API authorisation for Nexpay, Orbital, Oval and Global Send, and FCA EMI authorisation for Dzing Finance, Hryze and HFS. The firm assesses the right licence route, prepares and manages the full application, answers the FCA's questions, and compares a new authorisation with the purchase of an existing firm, including due diligence and the change of control. Details are on our UK EMI licence page.
£2,820 for money remittance, payment initiation or account information only, and £5,640 if any of the services in paragraphs (a) to (e) are included. The fee is non-refundable.
£5,640 for an authorised EMI (Category 5) and £1,130 for a small EMI (Category 3). The fee is separate from the €350,000 initial capital.
€20,000 for money remittance only, €50,000 for payment initiation and €125,000 for services in paragraphs (a) to (e). The highest applicable figure applies, not the sum.
No. It is capital retained in the company, not a fee, and excludes the application fee, professional work, staffing, technology, banking and working capital.
For 2026/27 an authorised EMI pays from £2,063, an authorised PI from £628, a small EMI £1,432 and a small PI £652, under PS26/14.
Only to the extent the firm stays above its capital requirement at all times. Founders raise separate working capital for salaries, suppliers and launch.
There is no single total; it depends on permissions, product complexity, team and infrastructure. The FCA fee is usually a small part of the commitment.
Buckingham Capital Consulting has obtained FCA payment institution and EMI licences for firms including Nexpay, Orbital, Global Send and Dzing Finance since 2013, and arranges the safeguarding and operating accounts alongside the application. The firm builds the capital model and launch budget with each client, so the business plan the FCA reviews is funded for the full forecast period.
Speak to an expert: WhatsApp +44 7563 115980, Telegram @buckinghamcapital or info@buckinghamcapitalconsulting.co.uk.
This article is general information, reviewed against the regulator’s published requirements on the date shown. It is not legal advice; the regulator’s current publications take precedence.