What are the capital requirements for payment institutions and how do these compare with banks?
For both payment institutions and banks, the capital requirement is the higher of the initial and the ongoing capital requirement. The initial capital requirement is a fixed, flat amount whereas the ongoing capital requirement tends to increase with business volume. A simplified presentation of the capital requirements for payment institutions as compared to banks is given below: Initial capital Payment institutions: EUR 20 000 money remitters EUR 50 000 mobile payments EUR 125 000 full-range payment service providers including any credit Banks EUR 5 000 000 Ongoing capital Payment institutions: The competent authorities of Member States may choose between one of three methods: • Method A: 10% of fixed overheads (admin expenses, rent, salaries, etc) • Method B: Degressive percentage (from 4% to 0.25%) of amount of monthly payment transactions in previous year • Method C: Degressive percentage (from 10% to 1.5%) of sum of relevant indicator (sum of interest income, interest expense, com
