Opportunities and Challenges for Payments &Fintech in Europe

A Bryan Cave Webinar

Thursday January 21, 2015

4-5 pm GMT; 11-12 noon Eastern; 8-9 am Pacific

Judith Rinearson, Bryan Cave New York and LondonJane Jee, Bryan Cave London

With GuestsDavid Parker, Polymath, LondonSarah Francis, Polymath London

• Introduction - Fintech and Payments: What makes Europeso Different? – Judie

• Payments Landscape in the EU – David– What is the EU and SEPA

– Which emerging products are growing?

• Types of Licence in the UK/EU – Jane

• Do you need a licence? Or should you just partner? - Sarah

• The process of obtaining a licence – Jane

• Passporting and related decisions – Sarah

• Key differences to US – Judie, Jane and Sarah

• What is PSD2? Key points – Jane

• Closing – Judie

Agenda

Section 1

Fintech and Payments: What makes Europe soDifferent?

Judith Rinearson

What makes the EU so different from the US?

• Moving towards single marketplace - US v.EU– Currencies

– Languages

– History/borders

• Desire to replace US leadership

• Attitudes on competition – rooting for theunderdog

• Attitudes on consumers – very paternalistic

Introduction

Section 2The Payments Landscape in the EU

David Parker

What is the EU?

What is the EU?

• 28 member countries

• 11 Currencies

• 24 Official EU Languages• Differing Alphabets i.e. Latin, Cyrillic

The Single Currency: Euro

The Single Currency: Euro

• 19 Countries using the Euro

• The European Economic Area (EEA) provides for the free movement ofpersons, goods, services and capital within the internal market of the EuropeanUnion (EU) between its 28 member states, as well as three of the four memberstates of the European Free Trade Association (EFTA): Iceland, Liechtensteinand Norway.

EEA

• SEPA consists of the 28 member states of the European Union, the fourmember states of the European Free Trade Association (Iceland,Liechtenstein, Norway and Switzerland), Andorra, Monaco and San Marino.

SEPA: Single European Payments Area

• SEPA consists of the 28 member states of the European Union, the fourmember states of the European Free Trade Association (Iceland,Liechtenstein, Norway and Switzerland), Andorra, Monaco and San Marino.

SEPA: Single European Payments Area

In Summary

• 19 Euro Countries

• 28 EU Members

• 33 EEA Members

• 34 SEPA Markets

All Europeans are NOT the same

13

• Despite the EU’s efforts, the financial services industry ineach country has unique characteristics which do notappear to be converging.; e.g.– German consumers generally use credit cards significantly less than

other Europeans, and also like to pay in cash; internet purchases areusually paid for through invoicing, with funds being transferred from abank account.

– Netherlands a lot of people pay online with iDEAL, an onlinepayment method that allows customers to order online using directtransfers from their bank account.

– Belgian customers primarily use cards and online bank payment topay online

– Luxembourg customers use credit cards.

– Poland mBank supports mobile payments direct from bank accounts,

– Finland has by far the highest proportion of non-cash payments inthe world

And Also Not For Payments

Payments Across Europe Also Differ Hugely

Source: Polymath Analysis ofPublished Data 2014

Use of Cash and Other Payments UK

Source: Deloitte2015

Market Share of Alternative Payments 2015

Source: Worldpay 2015

Emerging Payment Trends EMEA

Payment Type 2014 2019

Debit Card 29% 26%

eWallet 20% 21%

Bank Transfer 17% 18%

Credit Card 13% 12%

Charge Card 7% 5%

Cash on Delivery 6% 7%

PrePay 3% 5%

Direct Debit 1% 1%

eInvoices 1% 1%

Other 1% 2%

PostPay 1% 1%

Prepaid Card 1% 1%

Source: Worldpay 2015

Section 3Types of EU Licence

Jane Jee

• Full banking licence is granted by the Prudential RegulationAuthority (PRA) (part of Bank of England) and FinancialConduct Authority (FCA)

• PRA – prudential regulator - imposes Threshold conditionsand Fundamental Rules

• FCA – conduct regulator

• European Banking Authority (EBA) – ensures prudentialregulation and supervision across EU banking sector -

• Basel Committee on Banking Supervision issues the BaselAccords – prudential capital requirements for banks globally

Full banking licence

• Offer a wide range of services – loans, current accounts savingsaccounts etc.

• Hold and utilise deposits

• Offer interest

• Access to payment systems e.g. Faster Payments

• The Financial Services Compensation Scheme - Governmentbacking for e.g. savings

• Passporting - A firm authorised in the EEA can carry on certainpermitted activities in any other EEA state by either exercising theright of establishment (of a branch and/or agents) or providingcross-border services.

• Some services will require regulation by local EU host regulator

• More favourable securitisation terms from card schemes (costsare same)

What can regulated banks do?

• The process of setting up a bank was madesimpler in 2013 by the FCA - severalgovernment enquiries criticised the lack ofcompetition in retail banking.

• A raft of challenger banks are now establishedin Britain e.g. Charter Savings, Shawbrook,Paragon, Secure Trust, Hampden & Co,Aldermore and Metro. Not all offer currentaccounts.

• About 24 start-ups are in talks to gain bankinglicences.

•

Challenger banks

• The Open Banking Working Group – a collective ofbanking, open data and FinTech professionals, and widerbusiness and consumer groups – has been formed at therequest of the UK Government.

• Its aim is to develop a framework for adopting an openAPI standard across banking and explore how openbanking will impact consumers, regulators andindustry. This initiative builds upon the UK Government’sprior call for evidence on data sharing and open data inbanking.

• Due to report later this month (January 2016)

• Firms seeking authorisation to carry on regulated activitiesother than as a bank apply to the Financial ConductAuthority (FCA)

Open Banking Working Group

• Since April 2014 the FCA is the body responsible forgranting consumer credit licences and supervising firms

• Consumer Credit regulation encompasses credit broking,lending, hire and debt management across markets asdiverse as vehicle sales, dentistry, training and renewableenergy.

• There are two types of FCA Consumer Credit authorisation,referred to as Limited Permission and Full Permission.

• No passporting available – each jurisdiction in EU hasdifferent rules

Consumer Credit Licence

The Electronic Money Regulations 2011 create a separate authorisation andregistration regime for issuers of electronic money that are not full creditinstitutions, credit unions or municipal banks:

E-money Licence – 2 types –

• Full E-money institution (EMI)licence

• If you expect your business to not exceed an average of €5m of outstandinge-money per month, you may apply to register as a small EMI but

– no passporting– can provide unrelated payment services if the average monthly turnover isn’t more

than €3m

FCA e-money approach document

http://www.fca.org.uk/your-fca/documents/emoney-approach

FCA Guidance on e-money

https://www.handbook.fca.org.uk/handbook/PERG/3A.pdf

E-money Licence

http://www.fca.org.uk/your-fca/documents/emoney-approachhttps://www.handbook.fca.org.uk/handbook/PERG/3A.pdf

• As an EMI you are permitted to engage in the provision ofpayment services as well as other activities without needingto be separately authorised or registered under the PaymentServices Regulations 2009 (PSRs) BUT you have to reportall your regulated activities to FCA (or your regulator).

• However, the conduct of business requirements in Parts5 and 6 of the PSRs apply to all payment service providers,whether they are payment institutions, banks, buildingsocieties, e-money issuers or any other category.

E-money Licence

Law is in the first Payment Services Directive 2007/64/EC

• Implemented in UK by the Payment Services Regulations 2009

Need a licence to provide “payment services” i.e.

1. services enabling cash to be placed on a payment account and allof the operations required for operating a payment account;

2. services enabling cash withdrawals from a payment account andall of the operations required for operating a payment account;

3. the execution of the following types of payment transaction—

• (i) direct debits, including one-off direct debits;

• (ii) payment transactions executed through a payment card or asimilar device;

• (iii) credit transfers, including standing orders;

Payment Institution Licence

4. the execution of the following types of payment transaction wherethe funds are covered by a credit line for the payment service user—

• (i)direct debits, including one-off direct debits;

• (ii)payment transactions executed through a payment card or asimilar device;

• (iii)credit transfers, including standing orders;

5. issuing payment instruments or acquiring payment transactions;

6. money remittance;

7. the execution of payment transactions where the consent of thepayer to execute the payment transaction is given by means of anytelecommunication, digital or IT device and the payment is made tothe telecommunication, IT system or network operator acting only asan intermediary between the payment service user and the supplierof the goods or services.

•

Payment Institution Licence

• Businesses that exchange currency, transmit money or cashcheques for their customers are known as ‘Money ServiceBusinesses’.

• The term Money Service Business has a special meaningunder the Money Laundering Regulations 2007.

• Your business is a Money Service Business under theseregulations if it:– acts as a bureau de change - even if this is on a ship that isn’t

always in UK territorial waters

– transmits money, or any representation of money, in any way (justcollecting and delivering money as a ‘cash courier’ isn’t transmittingmoney)

– cashes cheques that are payable to your customers

• Even if your business only does one of these things, it is stillclassed as a Money Service Business.

Payment Institution Licence

• HMRC is the supervisory body for most Money ServiceBusinesses under the Money Laundering Regulations. If yourun a Money Service Business it’s your responsibility toregister with HMRC regarding AML unless you’re alreadysupervised by the Financial Conduct Authority (FCA) for thepurposes of the Money Laundering Regulations.

• You mustn’t act as a Money Service Business until you’reregistered with HMRC and supervised by the FCA.

• If you exchange currency or cash cheques onlyoccasionally, or only on a limited basis, then you don’t haveto register as a Money Service Business – low limits apply

Payment Institution Licence

Section 4Do you need a Licence?

Sarah Francis

• In simple terms this can often be answered by the questionare you at any time handling customer funds?

• If the answer is yes then its time to consider what type oflicence you need.

• Sitting outside of the EU and collecting consumer funds fordistribution is, in most cases, not an option. It is worthkeeping in mind that undertaking regulated activities withouta licence is a ‘criminal activity’.

• The proceeds of crime fall under Money Launderingregulation regardless of where the crime is committed

• However, there are what can be considered easiermeasures of sitting under a regulatory umbrella!

Do you need a Licence?

• It essentially comes down to time, money and return oninvestment.

• Is your business model based around payments:– If the answer is yes you are likely to be prepared for the time and

investment.

– If the answer is no its about keeping customers happy and addingrevenue then a partner might be the answer.

• Investment in a licence includes:– People

– Offices

– Technology

– Legal contractual structure

– Security (These are cash funds and can be substantial, especially ifthe schemes are involved.)

Do I want a Licence?

• In simple terms your Regulated Partner/Sponsor becomesresponsible for Compliance under the regulations.

• There are opportunities to become an Agent sitting underthe supervision of your chosen Partner.

• The opportunity to ‘practice’ regulatory business and gainexperience and knowledge.

• Decreased investment required

• Decreased delivery timeline

• Partner has to monitor and advise about regulatory changes

What can I get from a Regulated Partner?

• You can only work within their chosen areas

• It is their risk structure and approval.

• Requires strong communication lines

• Decreased revenue

The downside of a regulated Partner?

• They manage in entirety the Payment Project

• The distribution / branding is yours

• Utilise their technology (Good and Bad)

• Quick Delivery

• Requires careful choice to meet quality standards

• Requires a close working relationship

• Decreased investment

• Decreased returns

One stop Partner the good and the bad

• Presence– The cost of Locally based Senior management (Inc MLRO)

– The cost and up keep of offices

• Regulatory Licence– Application Cost (UK £5,000)

– Security (available Asset) typically €350,000

• Technology– Ether in-house or out-sourced - be prepared for detailed review

– Probable PCI requirements

• Scheme Licence– €30,00-80,000 (Dependent on Scheme and area covered)

– Security typically €100,000-€1,000,000 dependent on scope ofbusiness

The Cost of an EMI

• Initial Programme/Programmes– Typically €20,000 – 60,000 (dependent on scope of project)

• Processor set-up– Typically €20,000 -€60,000 (dependent on services used and scope

of project)

– Costs dependent on own BIN or shared BIN

• Scheme Costs (Pass Through)– These may include BIN Set-up Projects (c€15,000)

– Cost of becoming a TPP (Trusted Third Party), ISO (IndependentSales Organisation) or other representative c€5,000-10,000 perannum per Scheme.

The Cost - BIN Sponsorship

• The cost of setting up with a one-top shop programmemanager may be relatively simple. C€30-80,000

• There is of course correspondingly lower returns due toextended supply chain.

Cost of setting up with a Programme Manager

• Generally speaking if you offer credit to consumers youneed a licence

• There are a few exceptions. You do not need a licence justto accept payment by credit card (unless it is a credit cardyou've issued yourself).

• You do not need a licence to let customers pay for goodsthey have bought from you in 12 or fewer instalments,within a year from the date of sale (This instalment creditexemption increased from 4 to 12 months from March2015);

• You do not need a licence to offer credit to limitedcompanies. You generally do need a licence to offer creditto businesses such as sole traders and small partnerships(with two or three partners), but not if the value of your salesis always more than £25,000.

Consumer Credit Licence

Section 5The Process of obtaining a licence

Jane Jee

2013 FCA lowered the capital of start-up banks to 4.5% of theiroverall credit exposure, compared with between 7%- 9.5% formajor existing banks.

However application is a complex process – you needresources, time, money and tenacity!

Metro Bank – licensed first new high street bank for more than150 years . It took almost 2 years to obtain a bankinglicence (licence granted 2010 and Metro opened 40th branchin December 2015 in Maidstone, Kent)

Hampden & Co had to submit a 550-page application to thePRA for a licence

Above UK only - similar process across the EU

Full Banking Licence

• FCA has service levels – have to process application within3 months but if application not complete then FCA has 12months

• The applicant must be either:

• • a body corporate (for example, a limited company or LLP)constituted under the law of a part of the UK and whosehead office and, where relevant, its registered office, is inthe UK; or

• • a body corporate which has a branch that is located in theUK and whose head office is situated in a territory that isoutside the EEA.

Non banking licences

• The EMRs don’t define what is meant by a ‘head office’. Wherethe applicant is a body corporate constituted under the law of apart of the UK, this is not necessarily its place of incorporation orthe place where its business is wholly or mainly carried on.

• The FCA judge each application on a case-by-case basis, the keyissue in identifying the head office is the location of its centralmanagement and control, that is, the location of:

• 1. the directors and other senior management, who makedecisions relating to the business’s central direction, and thematerial management decisions on a day-to-day basis; and

• 2. the central administrative functions (for example, centralcompliance, internal audit).

• For the purpose of regulation 6(4) a ‘virtual office’ in the UK doesnot satisfy this condition.

Head office

Complete Application Form

Overriding key principles – take all reasonable steps to protect customers’interests and ensure continuity and reliability of service

• Need to comply with

– Capital Requirements

– Safeguarding

– Conduct of Business Rules

• Full disclosure of beneficial ownership chain

• Robust business plan & organisation structure - see next slides

• Risk management procedures – see slides

• Auditing, Safeguarding, Governance

• Internal control – may need internal audit function

• Systems and Controls – IT systems

Process for non-banking licences in EU

Background to application

• Location of business and intention to passport

• Sources of funding

• Target markets

• Marketing plan

• Types of product/service – both within regulation andoutside

• Types of payment service

• Use of branches including numbers and locations

• Budget for first 3 years

Level of detail to reflect scale and complexity of business

Business Plan

• A structure chart

• Description of intended use of agents distributors andbranches

• What functions are you outsourcing?

• Outsourcing arrangements – to third parties or other groupmembers?

• Participation in any national or international paymentsystems

Structural Organisation

• What is safeguarding?

• Why safeguarding?– No Financial Services Compensation Scheme (FSCS ) cover for

customers

– Therefore need to protect client funds

• How to safeguard?– Segregation in an account with a credit institution;

– Insurance or guarantee;

– Investment in secure, liquid assets held by a custodian

Safeguarding

• Settlement risk (a settlement of a payment transaction doesnot take place as expected)

• Operational risk (loss from inadequate or failed internalprocesses, people or systems)

• Counterparty risk (that the other party to a transaction doesnot fulfil its obligations

• Liquidity risk (inadequate cashflow to meet financialobligations)

• Market risk (risk from behaviour of entire market)

• Financial crime risk (robust AML and CTF measures)

• Foreign exchange risk (fluctuation in exchange rates)

Risk management procedures

• To register with HMRC as a Money Service Business you’llneed to fill in a registration form and provide all theinformation requested. You’ll also need to apply for a fit andproper test

• This test is a check to make sure that certain peopleinvolved in running the business meet the requirements ofthe Money Laundering Regulations.

• From 1st April 2015 the charge for the fit and proper test is£100 per person.

AML - Money Services Business

Section 6Passporting

Sarah Francis

• The mechanism by which your home authority informs otherauthorities you will be undertaking regulated business.

• Available only for full EMI’s and API’s.

• Covers only regulatory requirements.

• Be aware Branches may require additional localcommunication and/or regulation

• Some countries may require additional consultation overand above passport– For example when marketing a prepaid product in Ireland the

product structure and fees need to be approved by Irish Regulator.

What is Passporting?

• Regulatory authority does not cover:– Local consumer law

– Local Data Protection regulations

• There may be additional requirements – each countryshould be investigated accordingly.

Do not assume a Passport is all encompassing

• Each country can have a unique payment culture in exactlythe same way as it has a unique language – do not assumeeverything runs the same as it does in the UK.

• Differing payment types represent different risks of bothfraud and AML

• Differing spend patterns and lifestyles require consideration

• Available documents and third party databases can makeKYC a challenge.

Assessing the risks in each country

Section 7Key differences to the US

Judith, Jane and Sarah

• Most regulated entities must register as an MSB withFinCEN

• Risk Assessment – product, geographic, customer

• Four Pillars– Policies and procedures

– AML Compliance officer

– Ongoing Training

– Independent Testing and Review

• Customer identity verification

• Customer due diligence and enhanced due diligence

• Transaction monitoring

• Reporting $10,000 cash transactions; suspicioustransactions

AML in US

AML law requires as risk based approach utilising

• Know Your Customer Due Diligence – includingunderstanding beneficial owners of businesses

• Monitoring of all transactions (no minimum or maximum)

• Reporting of Suspicious Activities (In the UK this would beto the NCA )

• Training of all involved personnel

• Appointment of an MLRO (Money Laundering ReportingOfficer)

• Failure to report activity can result in Criminal Proceduresand ultimately Jail!

AML in UK/Europe – Some similarities

• Gramm Leach Bliley – for financial institutions – requiresdisclosure about what personal data collected and held, howused; consent for marketing use

• Federal Trade Commission (FTC) Act - prohibits unfair ordeceptive acts or practices, including failure to protectconsumer data or failure to comply with posted privacypolicies

• Fair and Accurate Credit Transactions Act

• PCI compliance standards – credit card data

• State data breach and privacy laws

Data Protection in US

• First Data Protection Directive passed in 1995 in EU led tothe Data Protection Act 1998 in UK

• In January 2012, the European Commission proposed acomprehensive reform of data protection rules in the EU

• The proposed reform consists of two instruments:– The General Data Protection Regulation will enable people to

better control their personal data.

– The Data Protection Directive for the police and criminal justicesector will ensure that the data of victims, witnesses, and suspects ofcrimes, are duly protected in the context of a criminal investigation ora law enforcement action and facilitate cross-border cooperation tocombat crime and terrorism more effectively across Europe.

• Effect of Shrems case - Court of Justice of the EU (CJEU)October 6th 2015 ruling invalidating Safe Harbour

Data Protection in UK/Europe

• Eu data protection regulators have formed “the Article 29 WorkingParty,” (A29WP) A29WP will not take enforcement action until the endof January 2016 to allow businesses to put alternative arrangements inplace

• However the Court of Justice of the European Union (CJEU)’s twocentral concerns must be addressed

• First, US intelligence services can access data in an "indiscriminategeneralised manner." If U.S. intelligence agencies can still access datarelating to "all persons and all means of electronic communication andall the data transferred, including the content of the communications”then it will fail. Specific limitations will therefore need to be set out in theagreement.

• Second, the new safe harbour must include appropriate guarantees toprotect EU citizens. U.S. citizens and legal residents have a judicialremedy under section 702 of the Foreign Intelligence Surveillance Act of1978 against government surveillance, EU citizens do not have similarrights. An independent body of an equivalent status to the FTC or FISCand a mechanism to enable EU citizens to initiate complaints to such abody would address the court's concerns.

Data Protection in EU – Safe Harbor 2.0?

• Truth in Lending Act, Regulation Z – credit cards and creditprograms

• Electronic Funds Transfer Act, Regulation E – debit cards,and (soon) prepaid cards

• Visa/MasterCard/Amex/Discover “scheme rules”

• Consumer Financial Protection Bureau – CFPBenforcement actions and regulations

Consumer Protection in the US

• No consistent and uniform definition of consumer in EU law

• Consumer law differs between Member States, partly as aresult of transposing EU directives into national legislation

• EU action on consumer policy is based on two measures:– The European Consumer Agenda, which is the new strategy for EU

consumer policy in line with the EU's growth strategy – Europe 2020

– and the EU Consumer Programme 2014-20 – the financialframework complementing the strategy.

• The EU Consumer Agenda has four main objectives:– improving consumer safety;

– enhancing knowledge;

– improving implementation,

– stepping up enforcement and securing redress and aligning rightsand key policies to economic and societal challenges.

Consumer Protection in EU

• The Directive on Consumer Rights(2011/83/EC) replaces, as of 13 June 2014, Directive97/7/EC on the protection of consumers in respect ofdistance contracts and Directive 85/577/EEC to protectconsumer in respect of contracts negotiated away frombusiness premises.

• Directive 1999/44/EC on certain aspects of the sale ofconsumer goods and associated guarantees as wellas Directive 93/13/EEC on unfair terms in consumercontracts remains in force.

• No single EU-wide definition of what is fair!

Consumer Protection Laws EU

• The Consumer Rights Act 2015 (which came into force inOctober 2015) together with Regulations creates a greatlysimplified body of consumer law.

• Taken together, they set out the basic rules which governhow consumers buy and businesses sell to them in the UK

• 2 key aspects– For the first time rights on digital content have been set out in

legislation

– There are now also new, clear rules for what should happen if aservice is not provided with reasonable care and skill or as agreed.

Consumer Protection Laws UK

Section 8PSD2 overview

Jane Jee

• Passed into effect in January 2016 so Member states haveto implement it by January 2018

Rationale for PSD2?

• PSD1 Review clause

• Differing interpretations in Member States

• Market changes

• Security issues

PSD2 has same basic structure as PSD1 but broader scope -

Increased territorial scope and narrowed exemptions called“negative scope provisions”

PSD2 – an overview

The Main Changes

• Access to Bank Accounts (Article 36)

• Authorisation Requirements

• All Currencies

• One Leg Out - now in scope

• Authentication/Security

• Transparency

• Third party access to Accounts (“XS2A”)

PSD2 – an overview

• Access to Bank Accounts

– Article 36“Member States shall ensure that payment institutionshave access to credits institutions’ payment accountservices on an objective, non-discriminatory andproportionate basis. Such access shall be sufficientlyextensive as to allow payment institutions to providepayment services in an unhindered and efficient manner.The credit institution shall provide the competentauthority with duly motivated reasons for any rejection

Designed to prevent banks from refusing to open andmaintain bank accounts for payment institutions.

Access to bank accounts

Other Changes

• Restriction of the “Limited Network” exemption

• Restriction of the “Commercial Agents” exemption.

• Passporting – Role of the EBA & supervision ofagents & branches

Note: PSD2 confers 11 mandates on the Europeanbanking Authority of which 5 are Guidelines and 6are Technical Standards

PSD2 – other changes

• Follow up questions & contact details - -

– Judie Rinearson judith.rinearson@bryancave.com

• US # 212-541-1135 UK# 44 (0) 20 3207 1280

– David Parker

• http://www.polymathconsulting.com/

– Jane Jee jane.jee@bryancave.com

• UK # 44 (0) 20 3207 1322

– Sarah Francis

• http://www.polymathconsulting.com/

Thank you!

mailto:judith.rinearson@bryancave.comhttp://www.polymathconsulting.com/mailto:jane.jee@bryancave.comhttp://www.polymathconsulting.com/

Opportunities and Challenges for Payments & Fintech in EuropeAgenda�Section 1 ��Fintech and Payments: What makes Europe so Different?Introduction�Section 2 �The Payments Landscape in the EU �What is the EU?What is the EU?The Single Currency: EuroThe Single Currency: EuroEEASEPA: Single European Payments AreaSEPA: Single European Payments AreaAll Europeans are NOT the sameAnd Also Not For PaymentsPayments Across Europe Also Differ HugelyUse of Cash and Other Payments UKMarket Share of Alternative Payments 2015Emerging Payment Trends EMEA�Section 3 �Types of EU LicenceFull banking licenceWhat can regulated banks do?Challenger banksOpen Banking Working GroupConsumer Credit LicenceE-money LicenceE-money LicencePayment Institution LicencePayment Institution LicencePayment Institution LicencePayment Institution Licence�Section 4 �Do you need a Licence? �Do you need a Licence?Do I want a Licence?What can I get from a Regulated Partner?The downside of a regulated Partner?One stop Partner the good and the badThe Cost of an EMIThe Cost - BIN SponsorshipCost of setting up with a Programme ManagerConsumer Credit Licence�Section 5 �The Process of obtaining a licence �Full Banking LicenceNon banking licencesHead officeProcess for non-banking licences in EUBusiness PlanStructural OrganisationSafeguardingRisk management proceduresAML - Money Services Business�Section 6�Passporting �What is Passporting?Do not assume a Passport is all encompassingAssessing the risks in each country�Section 7�Key differences to the US �AML in USAML in UK/Europe – Some similaritiesData Protection in USData Protection in UK/EuropeData Protection in EU – Safe Harbor 2.0?Consumer Protection in the USConsumer Protection in EUConsumer Protection Laws EUConsumer Protection Laws UK�Section 8�PSD2 overview �PSD2 – an overviewPSD2 – an overviewAccess to bank accountsPSD2 – other changesThank you!