Operating licences of payment institutions

Only entities authorised to do so pursuant to  Act no. 114/2021 on Payment Services may provide payment services.

Pursuant to Point 23 of Article 3 of the Act, only the following entities may provide payment services:

• Financial undertakings authorised to accept deposits or other repayable funds from the public and to grant credit.
• Electronic money institutions.
• Post office giro institutions entitled under national law to provide payment services.
• Payment institutions.
• The European Central Bank and the central banks of states within the European Economic Area (EEA).
• Public authorities where the payment services are not connected with their functions as public authorities.
• Payment institutions with limited authorisation.
• Certain legal or natural persons that have been granted an exemption pursuant to Article 35 of the Act.

An application for authorisation as a payment institution must be submitted in writing and accompanied by the required information. The Central Bank of Iceland (CBI) has prepared an overview of the information that it requires to accompany an application.

The CBI supervises payment institutions and other payment service providers pursuant to the Act on Payment Services. On this basis, the CBI has issued Rules No. 88/2020 on the safeguarding of funds received by payment institutions.

As part of the processing of an application for authorisation as a payment institution, the CBI assesses the fitness and propriety of the institution’s board members and managing director pursuant to Article 11 of the Act on Payment Services, cf. Articles 52 and 52a of the Act no. 161/2002 on Financial Undertakings.

As part of the processing of an application for authorisation as a payment institution, the CBI may be required to assess whether its shareholders are suitable to hold a qualifying holding pursuant to Article 5 of the Act on Payment Services, cf. Chapter VI of the Act on Financial Undertakings.