Regulatory AlertsEuropean Union: fintech & payments regulation
RegulatedEU fintech regulated via PSD3/PSP, MiCA, & EMD; no single EU licence
- Core law
- Payment Services Directive 3 (PSD3) / Payment Services Regulation (PSR)
- Entry capital
- EUR 20,000 (Payment Institution)
- Approval timeline
- 3-6 months to authorization
- Customer assets
- Segregated or insured; strict safeguarding rules
- Data protection
- GDPR · National Data Protection Authorities
- Sandbox
- Yes - EU Regulatory Sandbox (PSD2/PSD3)
The EU regulates fintech through a harmonized but nationally implemented framework. Payment services are governed by PSD3/PSR, while crypto-assets fall under MiCA. E-money issuance is regulated by the EMD. There is no single EU-wide license; firms must obtain authorization from a National Competent Authority (NCA) in a Member State and use the EU passport for cross-border services.
Recent regulatory developments include the end of the MiCA transition period for crypto-asset service providers (CASPs) in March 2026, requiring full authorization. The EBA has issued guidance on the interplay between PSD2 and MiCA for electronic money tokens, clarifying that dual authorization burdens should be avoided where possible.
Which licence do you need?
| Your activity | Requirement | Capital | Timeline | Authority |
|---|---|---|---|---|
| Payment processing / gateway | LicencePayment Institution (PI) or Credit Institution[1][2] Requires authorization under PSD3/PSR; passporting allowed | EUR 20,000 (PI) | 3-6 months | National Competent Authority (NCA) |
| E-money & wallet issuance | LicenceElectronic Money Institution (EMI)[1][3] Regulated under EMD; MiCA applies to crypto-assets | EUR 350,000 (initial capital) | 3-6 months | National Competent Authority (NCA) |
| Domestic money transfer | LicencePayment Institution (PI)[1] Domestic transfers fall under PSD3/PSR scope | EUR 20,000 (PI) | 3-6 months | National Competent Authority (NCA) |
| Cross-border remittance | LicencePayment Institution (PI)[1] Cross-border payments covered by PSD3/PSR | EUR 20,000 (PI) | 3-6 months | National Competent Authority (NCA) |
| Agent network | RegistrationAgent Network Registration[2] Agents must be registered with the authorized PSP | — | — | National Competent Authority (NCA) |
| Open banking / account information | LicenceAccount Information Service Provider (AISP)[2] Requires authorization under PSD2/PSD3 for AIS/PIS | — | 3-6 months | National Competent Authority (NCA) |
| Foreign-exchange services | LicencePayment Institution (PI)[1] FX services are payment services under PSD3/PSR | EUR 20,000 (PI) | 3-6 months | National Competent Authority (NCA) |
New — what changed recently
- 2026-03-02End of MiCA Transition Period — Crypto-asset service providers must obtain full authorization under MiCA, ending the no-action letter transition period.[1]
- 2025-01-01EBA Opinion on PSD2/MiCA Interplay — Clarified regulatory overlap for crypto-asset service providers transacting electronic money tokens to prevent dual authorization burdens.[3]
- 2024-10-16ESMA Opinion on MiCA RTS — ESMA provided feedback on draft regulatory technical standards for crypto-asset service provider authorizations and notifications.[4]
Market-entry checklist
- 1Choose Member State for AuthorizationSelect a National Competent Authority (NCA) for your primary EU establishment, considering supervisory focus and speed.
- 2Prepare Minimum CapitalEnsure EUR 20,000 for Payment Institutions or EUR 350,000 for Electronic Money Institutions is held as initial capital.
- 3Submit Authorization ApplicationFile detailed application with NCA including business plan, governance, and ICT security risk management processes.
- 4Implement Safeguarding RulesEstablish segregated accounts or insurance for customer funds as required by PSD3/PSR and EMD.
- 5Register for EU PassportOnce authorized, notify your NCA to passport services to other EU Member States via the single notification procedure.
Sources
- Opinion on the end of the No-action Letter transition period · 2026-02-12
- Consolidated version of EBA amending Guidelines on ICT and security risk management · 2026-05-19
- Opinion on the interplay between PSD2 and MiCA in relation to crypto-asset service providers that transact electronic money tokens
- ESMA Opinion on MiCA Regulatory Technical Standards for Crypto-Asset Service Provider Authorisations and Notifications · 2024-10-16