Passporting a Cyprus PSP Licence Across the EU
A payment institution licence obtained in Cyprus is not confined to the local market. Under PSD2’s passporting framework, a Cyprus-authorised payment institution can offer its services throughout the European Economic Area, on a cross-border basis or through a branch or agent, without needing to obtain a fresh licence in each Member State.
The Passporting Mechanism
To passport its services, a Cyprus payment institution notifies the Central Bank of Cyprus of its intention to provide services in one or more other Member States, identifying the countries and services involved. The CBC then communicates this information to the host state regulators within the timeframe set out in PSD2.
Branches Versus Cross-Border Services
Firms can passport either by providing services on a cross-border basis, without a physical presence in the host country, or by establishing a branch there. Establishing a branch generally involves a more detailed notification, including information on the branch’s management and local operational arrangements.
Using Agents in Other Member States
Where a Cyprus payment institution wishes to provide services through agents established in another Member State, this too typically requires notification through the passporting process, with the host regulator given the opportunity to raise concerns before the arrangement proceeds.
Why This Matters Commercially
Passporting is often the primary commercial reason firms choose to obtain an EU payment licence in the first place: a single, well-run authorisation process in Cyprus can unlock access to the entire EU single market for payments, rather than requiring separate applications in each target country.
Practical Planning
Firms planning to passport should build their target market strategy into their original application and business plan, since a well-articulated cross-border strategy from the outset tends to make the subsequent passporting notifications more straightforward.
Enalian advises payment institutions, e-money institutions and fintech businesses on licensing, authorisation and ongoing regulatory compliance in Cyprus. If you are exploring a PSP or EMI licence, or need support with an existing authorisation, our team can help. Get in touch with our team to discuss your specific circumstances.
This article is provided for general informational purposes only and does not constitute legal, tax or regulatory advice. Regulatory requirements are subject to change; readers should seek specific advice on their circumstances before taking action.
