Estonian Payment Institution Licence

A payment institution is a company that is authorised to provide payment services without being a bank. In Estonia, payment institutions are authorised and supervised by the Estonian Financial Supervision Authority (Finantsinspektsioon). The Estonian rules follow the EU Payment Services Directive, so the basic concepts are the same across the European Union.

This guide explains in general terms what a payment institution licence allows, who needs one, what the main stages of the process are, and how we work with clients who want an Estonian payment institution.

What a payment institution licence allows

A payment institution may provide the payment services listed in its authorisation. Depending on the business model, these can include, for example:

executing payment transactions, such as credit transfers and card payments;
money remittance, where funds are received from a payer only in order to pass them to a payee;
acquiring payment transactions for merchants;
issuing payment instruments;
payment initiation and account information services.

A payment institution is not a bank: it may not take deposits, and client funds received for payments must be protected in the way the law requires. It also may not issue electronic money. If your business model involves storing value for customers in the form of e-money, you need an e-money institution (EMI) licence instead.

Once authorised in Estonia, a payment institution may in principle offer its services in other EU and EEA countries through the EU passporting procedure, which starts with a notification to the Estonian supervisor. Whether and how passporting applies to your plans is something to assess case by case.

Who needs a payment institution licence

You typically need a licence if you want to move money on behalf of your clients as a business: a payment service for merchants, a cross-border money transfer service, a platform that collects and pays out funds for its users, or an app that initiates payments from customers' bank accounts. Whether your specific model requires authorisation, and which payment services it must include, depends on the details. That assessment is part of the preparation.

The main stages of the process

The exact requirements are set by law and by the supervisor's guidance and change over time. In general, the process has the following stages:

Business model and scope. Define which payment services the company will provide, to whom, in which countries and with what expected volumes. This determines the licence scope and the requirements that follow from it.
The Estonian company. The applicant is an Estonian company with its management and a real presence in Estonia as required for a supervised institution.
People and ownership. Managers must be suitable and have the necessary knowledge and experience. Owners with a qualifying holding are assessed for their reliability and the origin of their funds.
Capital. The institution must have the initial capital required for the payment services it will provide, and it must meet ongoing own-funds requirements after authorisation.
Application documents. A licence application is a substantial set of documents: typically a business plan and financial forecast, a description of the governance and internal control system, rules for the prevention of money laundering and terrorist financing, the safeguarding of client funds, IT and security arrangements, risk management, outsourcing and business continuity.
Assessment by the supervisor. The Financial Supervision Authority reviews the application, usually asks questions and requests additional information, and then decides. A state fee is payable for the application.
After authorisation. The institution must keep meeting the requirements, report to the supervisor and keep its documents and systems up to date.

Preparing a complete application takes time and the supervisor's review takes time as well. The duration depends heavily on the business model, the quality of the documents and the questions raised in the review, so no honest provider can promise a fixed date.

How we work with you

The Estonian payment institution service is listed on our licensed and regulated companies page with a "from" price. That means it is quoted individually: the final price depends on your business model and on the scope of the work.

You fill in the quote request form: the service, a short description of the planned activity, the ownership structure and your desired timeline, together with your contact details.
We review the information and reply by email with a quote that states what is included.
No work starts and no payment is taken before you have received and accepted the quote.

Please note:

State fees are not included in our prices and are charged separately.
The licence decision is made by the Financial Supervision Authority. We cannot guarantee that a licence will be granted, or that it will be granted within a particular time.
As a provider licensed by the Estonian Financial Intelligence Unit (licence FIU000117), we must carry out due diligence on our clients, including the owners and managers of the planned institution.
All communication about your request takes place by email.

Payment institution or e-money institution?

The two are often confused. A payment institution moves money; an e-money institution can also issue electronic money, meaning stored value that customers hold with the institution and can spend later, for example on a prepaid card or a wallet balance. An EMI licence generally involves higher capital and more extensive requirements. If you are not sure which you need, describe your model in the request form and we will address it in our reply. Read more in our guide to the Estonian EMI licence.

Related guides

This guide is general information about Estonian payment institutions and our service. It is not legal advice, and it does not replace an assessment of your specific business model.