Technology has advanced in all areas and sectors, and the financial sector has not been left behind. Although our society tends to associate money transactions with banking, the reality is that today there are many financial services that can be offered by payment entities. These entities are booming because consumer expectations have changed, due to both the convenience and flexibility that new fintech products can bring and to the need for digitalization created by lockdowns 

In 2020 alone, the percentage of the Spanish population that had made payments by cell phone and that had used apps to transfer money to individuals increased by nearly 10% and 13% respectively. It is clear that the Spanish market is opening up to fintechs and their services. But what exactly does a payment institution do and who regulates them?

Payment institutions may offer a wide range of services or offer only one. Regardless of their scope, it is the Bank of Spain (Banco de España) that has the task of authorizing the creation of payment institutions, in addition to preventing money laundering or other monetary infringements.

In this article, we will explain further what payment institutions are and how to become one in three steps.

What is a payment institution in Spain?

As mentioned above, there are many types of payment institutions, distinguished by the services they offer. However, the Bank of Spain defines all payment institutions as legal entities with administrative authorization to provide and execute payment services.

These services include:

  • Cash deposits and withdrawals on a payment account
  • The execution of payment by transfer, direct debits or payment transactions by card or similar device, either by debit or credit line.
  • Issuance of payment instruments or acquisition of payment transactions
  • Money transfers
  • Initiation of payments
  • Handling of account information

Each entity can choose which services it wants to offer, as long as they are well defined in its business plan.

Other types of entities governed by the Bank of Spain

Although payment institutions can encompass many functionalities and services, there are other types of financial institutions that are more specific due to their more specialized offerings. These are some of the main examples:

Electronic money institutions. They are authorized to issue electronic money to make payments to third parties through virtual cards, telephones or computers.

Credit institutions. These are entities engaged in making loans to third parties. Banks, cooperatives, foreign credit branches and savings banks are common examples.

Account information service providers. Also known as “aggregators” or “payment service providers”, they are individuals or legal entities that can access their customers’ payment account information and in turn present the information in real time.

Services that extend beyond the above are not supervised by the Bank of Spain. Therefore, any claims by customers are resolved through the courts or consumer authorities.

How to become a payment institution in Spain

Now that we have established a good basis regarding the services they can provide, let’s see how you can register as a payment entity in three steps.

#1. Identify the type of license required

There are registration or licensing regulations depending on the services provided and the amount of capital to be handled.

Authorization of payment entities In general, this authorization must be requested in order to create a payment institution. However, there are some exceptions: monthly transactions must be below €3,000,000 per month, only information services may be offered, and the services must be provided through a limited network or by telecommunications operators.

Registration of entities with low turnover. This simplified regime can be requested if the total value of the payment transactions to be executed will not exceed €3,000,000 per month.

Registration of account information service providers. This is the registry indicated for entities whose services are to be limited to account information services.

Registration of exclusion by limited network or telecommunications operators. This registration may be requested if the payment services are provided through instruments that can only be used on a limited basis or if they are communication network providers that offer payment services to their subscribers.

Authorization of electronic money institutions. If you will provide electronic money services as explained in the previous section, you need to apply for this special authorization in order to obtain the necessary license.

Once you have decided on the type of license, it is time to move on to the requirements.


#2. Comply with the requirements for obtaining the license.

Although each type of authorization or registration has its own requirements, there are two main things that every entity must comply with:

  • A solvency guarantee based on a certain amount of own funds
  • Protecting data and safeguarding funds received from users

In turn, the Bank of Spain will always ask for a detailed business plan, documentation supporting your solvency and criminal record.


#3. Initiate the authorization or registration process with the regulator.

Before applying, the business model must be well defined, the applicable regulations must be known and the documents that must be submitted must be known. The Bank recommends filling out a “pre-application for registration authorization” form where you can make an appointment to explain your project and ask any questions you may have.

Although the application for registration may be submitted by mail or in person, it is advisable to submit it electronically through the “Processing” section available at the Electronic Registry of the Bank of Spain.

These are the steps to be followed:

  1. Access the Electronic Register. You can use any of the authentication systems supported by the Bank of Spain, such as the digital certificate or the Cl@ve Pin.
  2. Once inside, select “Fill in the form” and choose the option according to the actuator.
  3. Fill in the requested data and attach the necessary documentation.
  4. When ready, press the “Submit” button.
  5. If everything is processed correctly, you will see a screen informing you of the status of your application and giving you access to consult the “Acknowledgement of Receipt”. It is recommended that you save or print this page to serve as proof of the transaction.
  6. If you need to consult your application, you can do so from the “Consult my documents submitted by Electronic Registry” section.

Once the application has been sent, the Bank of Spain undertakes to reply within three months. However, it is important to be aware of any communication you may receive in case you need to correct the application or add any documents or supporting documents.

What to do after obtaining the license

From the moment you receive approval from the Bank of Spain, it’s time to get down to work and execute the submitted business plan – and at Treezor, we can help you with this.

We offer a white label solution for regulated establishments that will help you grow fast and go further. Our services include:

  • Card issuing. Issuing of physical and/or virtual cards compatible with Apple Pay, Google Pay and Samsung Pay.
  • Card processing. Management of transaction processing and authorization through the Treezor platform, connecting directly with the issuing processor of your choice.
  • SEPA processing. Integration with Treezor API for processing all SEPA (Single Euro Payments Area) transactions, including all payment methods: SCT, SDD Core and SDD B2B.

We invite you to read Shine’s success story to see a real example of what is possible with Treezor.


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Key points:

  • Payment institutions are legal entities with administrative authorization to provide and execute payment services.
  • There are different types of payment institutions and licenses depending on the services they offer, the most common being payment, credit, electronic money and account information service providers.
  • The Bank of Spain is the regulatory body for payment institutions, and it is through its Electronic Registry that they can apply for the necessary license to offer payment services.