Cyprus PSP License
-
Cyprus is emerging as a Payment Service Provider (PSP) licensing hub because authorisation by the Central Bank of Cyprus enables EU/EEA passporting under PSD2, supported by a mature, English-speaking fintech services ecosystem.
What is a Cyprus PSP License?
A Cyprus PSP licence typically refers to authorisation by the Central Bank of Cyprus as a Payment Institution (or, where relevant, an Electronic Money Institution) under Cyprus’ PSD2-based payments legislation, allowing a firm to provide regulated payment services (such as card acquiring, money remittance, and other payment execution services) and to expand across the EU/EEA via passporting.
For high-risk sectors—such as licensed online casinos and legal adult-content businesses—this can be an attractive choice because EU authorisation and supervision can improve credibility with banking partners and counterparties, while providing a clear compliance framework (including AML/CFT controls, customer due diligence, transaction monitoring, and safeguarding requirements) that sophisticated high-risk merchants expect; in practice, success depends on demonstrating robust risk management, enhanced due diligence, and ongoing monitoring that meet regulator and scheme/bank expectations for these verticals.
Payment Institution and EMI License in Cyprus
In Cyprus, a Payment Institution (PI) licence authorises a firm to provide the payment services listed under PSD2 (e.g., money remittance, card acquiring/payment initiation, executing transfers), but it cannot issue electronic money—so it generally cannot run “stored-value” wallets where users hold a spendable balance as e-money.
An Electronic Money Institution (EMI) licence covers the same payment services and adds the key permission to issue electronic money (i.e., stored monetary value representing a claim on the issuer), which is why EMIs are typically used for e-wallet/prepaid balance models and come with e-money specific obligations such as issuance/redemption and related safeguarding rules.
Crypto-Asset Service Provider (CASP) License in Cyprus
In Cyprus, a Crypto-Asset Service Provider (CASP) is a business that provides crypto-asset services in or from Cyprus and is supervised—primarily for AML/CFT compliance—by the Cyprus Securities and Exchange Commission (CySEC), including through registration/authorisation, fit-and-proper checks on owners and management, and ongoing requirements for KYC/customer due diligence, source-of-funds verification, transaction monitoring, suspicious activity reporting, and risk-based controls.
CySEC’s framework also ties initial capital and organisational expectations to the type of crypto activity performed, and maintains public registers of registered entities. More broadly, Cyprus CASPs are transitioning into the EU’s Markets in Crypto-Assets Regulation (MiCA) regime, which introduces a harmonised authorisation and supervision framework across the EU for crypto-asset service providers.
A Crypto-Asset Service Provider (CASP) authorisation enables a firm to legally provide defined crypto-asset services to customers—typically including operating a trading platform/exchange, custody and administration of clients’ crypto assets (wallet services), exchange of crypto-assets for fiat or for other crypto-assets, execution and reception/transmission of orders on behalf of clients, placing of crypto-assets, and transfer services for crypto-assets (the exact permissions depend on what the firm is authorised to do). Under the EU MiCA framework, a CASP can then offer the authorised services across the EU/EEA through passporting, while meeting ongoing requirements around capital, governance, safeguarding/custody controls, market integrity, and AML/CFT compliance.
Managing Crypto and Fiat Payments in Cyprus
A Cyprus Payment Institution (PI) licence—authorised and supervised by the Central Bank of Cyprus under the PSD2 framework—can be a strong platform for managing fiat payment rails, such as SEPA transfers, merchant collections/settlement, and other regulated payment services, with a clear compliance perimeter for safeguarding and AML/CFT controls.
For crypto, the PI licence is most useful for the fiat side of the flow—supporting compliant on- and off-ramp structures (e.g., collecting EUR, settling to merchants, paying out to customers, and reconciling funds) while integrating with a separately authorised Crypto-Asset Service Provider (CASP) for crypto-asset services where required under the EU’s MiCA regime.
As a general rule, payment processors who wish to offer crypto and fiat payments have to obtain two separate authorizations from the Cyprus Central Bank (enjoying EU-wide passport):
a) a Cyprus Payment Institution (PI) License,
b) a Cyprus Crypto Asset Service Provider (CASP) License
What Are the Requirements for a Cyprus PSP License?
A Cyprus Payment Institution (PI) license is granted and supervised by the Central Bank of Cyprus (CBC) under Cyprus’s payment-services legal framework (which implements PSD2). centralbank.cy+1 In practice, the applicant should be a properly structured entity with real local substance (PSD2 is designed to prevent “brass-plate” setups by requiring that a payment institution provides at least part of its payment-services business in its home Member State). eur-lex.europa.eu The authorisation file typically includes a programme of operations (what payment services you will offer), a business plan with 3-year financial forecasts, evidence of initial capital (minimum €20,000 / €50,000 / €125,000, depending on which PSD2 Annex I services you provide), and detailed documentation of governance, internal controls, risk management, accounting procedures, safeguarding of client funds, and security arrangements—all assessed by the competent authority before approval.
A Cyprus CASP license (Crypto-Asset Service Provider authorisation) is now centred on the EU Markets in Crypto-Assets Regulation (MiCA), with CySEC overseeing the transition; notably, CySEC has reminded the market that MiCA authorisation applications are due by 27 February 2026, and that certain firms operating under the prior national framework may continue only within the transitional conditions (generally up to 1 July 2026, depending on their status and application outcome). cysec.gov.cy Substantively, a MiCA-ready CASP application must demonstrate robust governance and “fit & proper” management/shareholders, effective policies and procedures, adequate staff expertise, secure and resilient ICT systems and business continuity (aligned with DORA), strong AML/CFT systems (including transaction monitoring and related controls), record-keeping, clear complaints handling, conflicts-of-interest and outsourcing frameworks, client-asset/fund safeguarding (including segregation and protections in insolvency), and an orderly wind-down plan.
Prudentially, MiCA sets minimum initial capital based on the services you provide (Class 1 €50,000, Class 2 €125,000, Class 3 €150,000).
How Much Does a Cyprus PSP License Cost?
For a Cyprus Payment Institution (PI) license, the “government fees” are typically the Central Bank of Cyprus (CBC) regulatory fees paid on submission of the application (separate from your legal/advisory fees, audit, office setup, capital, etc.). Practitioner guides commonly describe a non-refundable application/examination fee of about €5,000, with incremental fees when you add/extend regulated payment services (often cited at €1,000 per additional service) and, where relevant, an additional fee for Account Information Services (AIS) (often cited at €500).
For a Cyprus CASP licence (MiCA / CySEC authorisation), CySEC sets an authorisation fee that depends on which crypto-asset services you apply for, and the fees add up if you request multiple services in one application. Under CySEC’s published fee framework, examples of application fees include €10,000 (custody/administration), €30,000 (operation of a trading platform), €5,000 (exchange), €8,000 (execution/placing/reception & transmission/advice/portfolio management), and €5,000 (transfer services). CySEC also provides for a €10,000 notification fee for certain regulated financial entities notifying an intention to provide crypto-asset services. Once authorised, CASPs pay an annual supervisory fee made up of a fixed component by service (e.g., up to €20,000 annually for operating a trading platform, €10,000 for custody, €5,000–€8,000 for other services) plus a turnover-based surcharge on crypto-asset service revenue above €500,000 (tiered percentages), with the total annual supervisory fee capped at €500,000.
Get in touch to obtain your Cyprus Payment Service Provider (PSP) License
If you’re considering a Cyprus Payment Institution / Payment Service Provider (PSP) licence, get expert guidance from Andrea Ricci, CPA to structure the application from day one—aligning your business plan, governance and compliance framework, safeguarding model, and cross-border strategy with EU expectations under PSD2. Tradepass International Tax LLC supports internationally focused fintechs with licensing-driven structuring and ongoing compliance planning so you can move forward with clarity and confidence. To request a fixed-fee quote and an initial assessment, contact Andrea Ricci, CPA
Stay updated on the global financial sector by checking our dedicated financial business insights!
Are you seeking assistance for your international business journey?