Payment Service Providers

It has become clear that the use of cash as the basis for the monetary system has several drawbacks in the developed economies of today. It is no surprise therefore, that there has been a drastic increase in the use of non-payment instruments such as debit and credit cards, credit transfers and direct debits overtaking the traditional use of cheques due to their efficiency and reliable processes.

Payment Services licensing is regulated under Maltese Legislation by the Financial Institutions Act, Chapter 376 of the Laws of Malta. The provisions of this Act effectively transpose the European Payment Services Directive (2007/64/EC) into Maltese Law making it applicable locally. The activities of licenced payment service providers ("PSPs") or payment instutitions are found under Article 2 of the Second Schedule of the Act.  These quasi-banking institutions are regulated on the same level as credit institutions but without the restraints of the provisions of the Banking Act 1994.

A PSP licensed in Malta by the Malta Financial Services Authority enjoys passporting rights to any EU Member State. This means that such financial institution has the right to establish a branch or to provide services in any other Member State without requiring any further authorisation or licensing. The right to ‘extend’ a Malta licence to other Member States is exercised by means of a simple notification to the Malta Financial Services Authority in accordance with the relevant provisions of the Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions.

This passporting right coupled with the relatively low costs for set-up, the availability of professional services, the possibility of enhancing tax efficiency and the emergence of Malta as a hub for wealth management, funds and financial services renders Malta one of the most attractive jurisdictions for the licensing of payment services.

Gonzi & Associates, Advocates have assisted a number of clients in the application and successful acquisition of a licence for payment services. We have also succesfully filed applications for electronic money institutions which institutions also have a secondary licence to provide payment services. Contact us if you are interesed in licensing a payment service or emoney product.

For further information on payment service providers refer to one of the following articles:



Payment Services Licence

Key Experts

Augusto Quintano
Augusto Quintano
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Elisa Meylak
Elisa Meylak
Legal Trainee
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