Payment Institution License

What Is a Payment Institution?

A payment institution within the meaning of Art. 12 of the PSPSA is a legal entity that has obtained a license from the BNB for the provision and execution of payment services within the territory of the Republic of Bulgaria and the European Economic Area. A PI may carry out all 7 categories of payment services listed in Annex 1 to the PSPSA, with the exception of the issuance of electronic money.

Payment Services a PI May Provide

Service 1: Services enabling cash deposits and withdrawals from a payment account, including all operations for the servicing of a payment account
Service 2: Execution of payment transactions — direct debits, credit transfers (including standing orders) and payment card or similar instrument transactions
Service 3: Issuance of payment instruments and/or acceptance of payment transactions (acquiring)
Service 4: Money remittance
Service 5: Payment initiation services (PISP — Payment Initiation Service Provider)
Service 6: Account information services (AISP — Account Information Service Provider)

Key Difference from EMI

The key difference between a payment institution and an electronic money institution is that a PI cannot issue electronic money. If you plan activities involving digital wallets, prepaid cards, or the storage of monetary value electronically, you need an EMI license.

Capital Requirements by Service Type

The amount of the minimum initial capital depends on the type of payment services applied for. The requirements are set out in Art. 14 of the PSPSA:

Service Type	Minimum Capital
Money remittance only (service 4)	BGN 40,000
Payment initiation services (service 5)	EUR 50,000 + PII
Account information services (service 6)	No capital — PII
Telecommunications / digital operators	BGN 100,000
Services 1-5 (full scope)	BGN 250,000

The capital must be fully paid in cash, and the origin of funds must be documented. Own funds are calculated using Method A, B, or C under Annex 2 to the PSPSA and must be maintained continuously after licensing.

Documents and Application Procedure

The license application is filed with the Governor of the BNB under BNB Ordinance No. 16. The required documents are identical to those for an EMI license, except for the electronic money-specific documents:

Articles of Association / Partnership Agreement with an appropriate scope of activity
Ultimate beneficial owner (UBO) documents and ownership structure
Management CVs and qualification questionnaires under Art. 5(1)(2) of Ordinance No. 16
3-year business plan with financial projections and market analysis
Internal rules for the prevention of money laundering (AML/KYC) under the Anti-Money Laundering Act
Description of the IT infrastructure, security measures, and business continuity plan
Professional indemnity insurance or bank guarantee
Agreement with a registered auditor
Source of capital documents
Criminal record certificates for all key persons

Management Requirements

Members of the management body must meet the same requirements as for an EMI — higher education, at least 3 years of experience in the financial sector, a clean criminal record, and must not appear on counter-terrorism lists. Each candidate completes a detailed qualification questionnaire.

Expanding the Scope of the License

A payment institution that already holds a license for certain payment services may request an expansion of the scope of the license to include additional services. An application must be filed with the BNB, accompanied by:

Updated business plan covering the new services
Evidence of additional capital (if applicable)
Updated internal rules and procedures
Description of technical readiness for the new services

Ancillary Activities

Under Art. 21 of the PSPSA, the payment institution may also carry out ancillary activities closely related to payment services:

Currency exchange (forex) linked to payment transactions
Operational services for payment systems management
Other business activities — with the limitation that the BNB may impose a prohibition if they threaten the financial stability of the institution

AISP and PISP — Special Regime

Account Information Service Provider (AISP)

AISP (Account Information Service Provider) provides users with consolidated information about their payment accounts held with different providers. To carry out this activity:

No initial capital required
A professional indemnity insurance (PII) or equivalent guarantee is required
The regime is registration-based, not license-based — AISP is entered in the BNB register
AISP does not have access to client funds and cannot initiate payments

Payment Initiation Service Provider (PISP)

PISP (Payment Initiation Service Provider) initiates payment orders at the request of the user from a payment account held with another provider. Requirements:

Initial capital: EUR 50,000
Mandatory professional indemnity insurance (PII)
The regime is license-based — a full license from the BNB is required
PISP does not hold client funds at any time

Limited Payment Institution

The PSPSA provides a simplified regime for payment institutions with a limited volume of activity — the so-called limited payment institution (Art. 28 PSPSA).

Registration Conditions

The average monthly volume of payment transactions for the preceding 12 months does not exceed EUR 3,000,000
The regime is registration-based (not license-based) — a simplified procedure
Cannot carry out passporting — activity is limited to the territory of Bulgaria
Upon exceeding the EUR 3M/month threshold, the institution must file for a full license within 30 days

Advantages and Limitations

The simplified regime is suitable for start-up companies with a small volume of transactions. The procedure is faster and the documentation requirements lighter. The main limitation is the inability to provide cross-border services in the EEA.

Passporting in the EEA

A licensed payment institution has the right to provide services throughout the EEA via the single European passport. The notification procedure includes:

Filing a notification with the BNB specifying the Member State and type of services
The BNB notifies the central bank (or other competent authority) of the host country
The notification period is 1 month from the filing of the application
The forms are: freedom to provide services (without physical presence), branch, or agents

When operating through agents, the BNB maintains a public register of all agents of licensed payment institutions. Agents act on behalf and for the account of the institution.

Frequently asked questions

What is the difference between a PI and an EMI?

The main difference is that a payment institution (PI) cannot issue electronic money, while an electronic money institution (EMI) can. An EMI can perform all PI services, plus issue e-money, manage digital wallets, and prepaid cards. In return, the capital requirement for an EMI is significantly higher — BGN 700,000 versus BGN 40,000-250,000 for a PI. If you plan activities involving the storage of monetary value, you need an EMI license.

What capital do I need for a payment institution license?

It depends on the type of services: for money remittance — BGN 40,000; for telecommunications and digital operators — BGN 100,000; for full-scope services (1-5) — BGN 250,000. No capital is required for AISP, and EUR 50,000 for PISP. The capital must be fully paid in cash with documented origin of funds.

What is a limited payment institution?

A limited payment institution is a simplified regime for companies with a monthly volume of payment transactions up to EUR 3,000,000. Instead of a license, registration with the BNB is carried out, which is faster and lighter from a procedural standpoint. The main limitation is that a limited PI cannot carry out passporting — the activity is limited to Bulgaria. Upon exceeding the threshold, you must file for a full license within 30 days.