Today we welcome newly authorised fintechs Lendermarket Limited and Rippling Payments Ireland Limited to the Fintech Ireland Fintech Maps.  Special thanks to the CompliReg for sponsoring and supporting version 16 of the Regulated Fintech Ecosystem Map* and the version 22 of the Regulated Emoney & Payments Map. 

* The Fintech Ecosystem Map is limited to authorised emoney, payments and crowdfunding firm and registered virtual asset firms

Special thanks to the Project Foundry for sponsoring the Indigenous Fintech Ireland Map.  Until we update that larger Map of more than 260+ fintechs, we are expressing our gratitude to the Team Project Foundry on our sectorial Fintech Maps. 
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• Sign up to our Newsletter here.​
• Need assistance with an emoney or payments authorisation or an account information service provider or virtual asset services provider registration application, check out Fintech Ireland and CompliReg's handy authorisation guides at https://fintechireland.com/fintech-authorisations.html. 

This blog and others are joint efforts between Fintech Ireland and CompliReg.

First Published Tuesday 9th April 2024

Before we dive into the detail contained in the new (issued 9 April 2024) "Central Bank Expectations for Authorisation as a Payment Institution or Electronic Money Institution, or Registration as an Account Information Service Provider", a couple of things to note:
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1. the format, look and feel of the new webpage on the CBI's website;
2. the links from How We Regulate leading to the Authorisation Page, regardless if you clicked on Payments Institutions, Electronic Money Institutions, Small Electronic Money Institutions or Account Information Service Providers redirect you to the same page. That page ends in payment-authorisation.  Seems that from a pragmatic and practical stance, the CBI is getting ready for the merging of the e-money and payment services regimes under the current PSD3 legislative proposal;
3. [12+ months for authorisation] although buried away at the bottom of the CBI's webpage, there is this very welcome statement about how long it may take to get authorised. "Experience suggests that it can take over 12 months for firms to provide all of the information necessary to enable a decision to be made" ;
4. [requirement for a pre-application meeting] each proposed Applicant must meet with the CBI before an Application is filed;
5. [no triple hatting] the Central Bank informs that it has not approved applications which propose triple hatting.  It also states that "Proposals to triple hat roles present significant doubt as to the commitment of an applicant firm to have adequate governance in place."
6. [dual hatting].  Dual hatting is permissible on a case-by-case basis, depending on the nature, scale and complexity of the proposal, and insofar as there is no potential or perceived blurring of the three lines of defence. Any proposal for dual hatting of PCF roles should be accompanied by a detailed rationale setting out how the role holder would have sufficient capacity, and the appropriate qualifications/experience, to effectively perform the proposed roles.
7. [appointment of CEO, chair & others] the Central Bank states that "the appropriateness of resources will be determined at each stage on a case-by-case basis, applicant firms which have made senior appointments (for example Chair and Chief Executive Officer) at the application point tend to progress through the authorisation process in a more timely manner.". The Central bank also states that "Applicant firms which have made the necessary senior appointments early in the process generally submit a more complete application and, therefore, tend to progress through the assessment process in a timelier manner."
8. currently, there is no fee for submitting an Application (but there is of a course the separate Industry Funding Levy);
9. Dormancy Policy - the CBI's dormancy policy applies when an applicant has not provided an adequate response within 60 working days following the issuance of comments. A “Minded to Deem Withdrawn” letter is sent to the applicant after 50 working days of comments issued, notifying the applicant that it has 10 working days to provide all outstanding documentation or the application will be considered withdrawn. If the applicant does not respond within the 10 working days, a “Deemed Withdrawn” letter is sent and the application is not considered further by the CBI.    

Now that we have covered the burning issues on most applicants' mind, let's turn to what the CBI has set out in its new/updated "Expectations for Authorisation as a Payment Institution or Electronic Money Institution, or Registration as an Account Information Service Provider"

Referred to below is the Pre-Application Key Facts Document (“KFD”). Issued 9 April 2024. The purpose of the KFD is to provide sufficient detail to the CBI on an applicant's proposal for authorisation/registration.  It would normally consist of c.15-20 pages. It should be included in first batch of documents an Applicant reads.

As you will note from the above diagram, the authorisation assessment process consists of the following three stages:

1. Exploratory Stage. This consists of two phases:

• Initial meeting with the applicant firm; and
• Submission of required information (Key Information Check) and initial assessment;

2. Assessment Stage; and

3. Authorisation/Registration Decision Stage.

Phase 2 – Key Information Check and Initial Assessment

In addition to ensuring that all required documentation has been provided, this phase encompasses an initial assessment of the submission.

At the end of this phase, the Central Bank will notify the firm of the outcome which is either:

• Progression

The Central Bank considers that the application can progress to the Assessment Stage.  A specific case manager is assigned who will lead the assessment, and will be the primary point of contact for the applicant firm during the assessment process.

• Issues have been Identified Precluding Progression

The Central Bank considers that the application cannot progress to the Assessment Stage.  The applicant will be advised as to the rationale for not progressing and will be provided with an opportunity to address the issues identified (through written submissions and/or meetings).

During this stage the Central Bank conducts its assessment of the application. The Central Bank may request additional information, and detailed assessment meetings in relation to one or more areas of the application will be undertaken with the applicant. High quality applications with comprehensive and complete information and explanations reduce the need for additional information requests. Individuals proposed for certain key roles (Pre-Approval Controlled Function roles) may be invited for interview as part of the assessment of their Fitness and Probity for the role for which they are applying.

At the end of the assessment process, the Central Bank will notify the firm of the outcome of its assessment. There are two possible outcomes:
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• Positive Outcome (“Minded To Authorise/Register” letter)

Where the applicant firm has positively demonstrated that it will meet all authorisation/ registration requirements and expectations, the Central Bank will issue a “Minded to Authorise/Register” letter which will include, inter alia, requirements to be addressed prior to authorisation/registration, conditions to be addressed post-authorisation, and the proposed level of capital to be held (neither conditions nor capital are applicable to Account Information Service Providers).

or

• Negative Outcome (“Minded to Refuse” letter)

In the event that the Central Bank is not satisfied following the conclusion of its assessment phase that it can authorise/register the firm, a “Minded to Refuse” letter will be issued. This will include the reason(s) for the Central Bank’s proposed decision. The letter will specify the period within which the applicant firm may make submissions in writing in relation to the proposed refusal. Any submissions made will be considered by the Central Bank before making a decision on the matter.

This is the stage in which the final decision as to authorisation/registration is made. There are two possible outcomes:

• Positive Outcome (Letter Granting Authorisation/Registration)

Subject to the pre-authorisation/registration requirements in the “Minded to Authorise” letter having been addressed, no new adverse information coming to the Central Bank’s attention in the interim, and agreement from the applicant firm as to the proposed conditions and capital (not applicable to Account Information Service Providers), a letter granting authorisation/registration will be issued, and the applicant firm will then be able to commence its regulated activities.

or
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• Negative Outcome (Letter of Refusal)

Where a “Minded to Refuse” letter has issued, the Central Bank will review any submissions made by the applicant firm. If the Central Bank is still not satisfied to approve an application following the review of any submissions to a ‘Minded to Refuse’ letter, it will issue a letter of refusal.

​The 90 day Service Standard clock for the Assessment Stage will be paused where an information request has been issued to the applicant until such time as a satisfactory response has been provided. In addition, the clock can be switched off entirely where any of the following arise:
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• Another regulatory authority has to be contacted;
• Persons are subject to interview;
• Significant legal issues arise;
• Significant fitness and probity issues arise;
• The business model is complex or novel in nature;
• Significant changes to the business model, the applicant’s shareholder structure or other key aspects of an application arise during the review process, or where the application becomes dormant; or
• The CBI is minded to refuse an application.  

The CBI has Dormancy Policy.

This means that when an applicant has not provided an adequate response within 60 working days following the issuance of comments. A “Minded to Deem Withdrawn” letter is sent to the applicant after 50 working days of comments issued, notifying the applicant that it has 10 working days to provide all outstanding documentation or the application will be considered withdrawn. If the applicant does not respond within the 10 working days, a “Deemed Withdrawn” letter is sent and the application is not considered further by the Central Bank.

A) You need to read the following before you put pen to paper on the actual application documents:

Thereafter read through the relevant Application Form from the list below:

B) Then you will need to get to grips with:

• the Irish Anti-Money Laundering, Counter-Terrorist Financing and Financial Sanction regime
• the Qualifying Shareholders of Payment Institutions and Electronic Money Institutions requirements
• Pre-Approval Controlled Function Roles regime

The following forms should be completed:

1) Legal Persons/Entities

• Application for a Legal Person
  

2) Natural Persons

• Application for a Natural Person 

3) Executive Directors of Legal Persons/Entities

• Application for a Director of a Legal Person or Entity with a Qualifying Holding

​While the above forms are not required to be completed for Account Information Service Providers, the Central Bank will assess the suitability of all legal and natural persons with a qualifying holding.

For all Pre-Approval Controlled Function roles (typically board members, senior management, key function holders), the following should be completed:

• Fitness and Probity Individual Questionnaires

These should be submitted electronically via the Central Bank of Ireland Portal. Please note access to the Portal is only provided once an application has progressed to Stage 2 - Assessment Phase.

In addition to the foregoing documents accessible above, it would make sense for Applicants to read and become familiar with:

Service Standards

• ​Service Standards issued by the CBI

Is there a fee?
There is currently no fee for submitting an application. Once authorised, a firm is subject to an annual Industry Funding levy. For further information on the levy see here.

How do I submit the application?
Applications must be submitted via Kiteworks. Please contact [email protected] to obtain access.

How long is the process expected to take?
The time taken to receive an authorisation decision is primarily dependent on the preparedness of an applicant firm to undertake the assessment process, and on the quality and timeliness of submissions. The Central Bank will, in accordance with relevant legislation complete its assessment within 3 months of the receipt of the application, or if the information is incomplete, within three months of receiving all of the information required for the Central Bank to make a decision on the application. Experience suggests that it can take over 12 months for firms to provide all of the information necessary to enable a decision to be made. See above for further information on Service Standards.

Is a Pre-Application meeting required before an Application can be submitted?
Yes, see above for details of the Initial Meeting which forms part of the Exploratory Stage.

What to do if I need more help?
For any authorisation related queries, you contact the Payments Authorisation Team ([email protected]). If you have a query in relation to new technologies, email [email protected].

If you need help and support too file your Application, talk to Peter Oakes at CompliReg via [email protected].

2024 is off to a slow start for those expecting a slew of authorisations and registrations by the Central Bank of Ireland of electronic money institutions, payments institutions and virtual asset services providers.

2023 saw just 5 electronic money firms become authorised in Ireland and just 1 payments institution became authorised.  Given that one of the emoney firms authorised was an upgrade from a payments institution authorisation, Ireland only welcomed 4 new companies to its emoney / payments sector. There was better news for the local crypto industry with 7 virtual asset service providers becoming registered in 2023 out of a pool of 11 such firms. These virtual asset firms and others that may get registered in 2024 can look forward to a deeper and more intense authorisation process should they choose Ireland to be their European home under the Markets in Crypto Asset Regulation. Fingers crossed.  And note MiCAReady.com is here to help those firms and other plan for their pan-European Union journey.

​Thus far in 2024 just one of these types of companies has received the Central Bank's imprimatur, that being Navro Payments Europe Limited, formerly known as Paytrix Ireland Limited.  According to publicly available Central Bank records, Navro Payments Europe was authorised as an electronic money institution on Friday 2 February 2024 (and only appearing on the Central Bank's register run of 6 February). In addition to emoney services, Navro Payments Europe was also authorised to provide payment service #3c (i.e.  Execution of credit transfers, including standing orders.)

Last August it was announced that fintech industry pioneer Joe Redmond had joined the Paytrix team as the new CEO for Ireland to drive its compliance and expansion plans across Europe. Other heavy hitters involved with Navro Payments Europe includes Peter Rowan, who joined the board of directors on 28 September 2022 and is listed on his linkedin profile as General Manager in addition to his director role. Other board directors of the newly authorised Irish company are Paytrix founders Edward Harrison and Aran Brown.  

Navro Payments is 100% owned by Paytrix Holding Limited.  The company was rebranded Navro Payments according to Companies Registration Office records pursuant to section 32 of the Companies Act 2014.

​Ireland is now home to 26 authorised electronic money institutions, 21 payments institutions, 4 standalone open banking firms, 11 virtual asset services providers and 5 crowdfunding services providers.  Rumour has it that a few more firms will hit these registers in the coming days.  We'll wait and see. 

Looking back over the Period H1 2020 to H1 2023 - to co-ordinate with the Central Bank of Ireland’s own Regulatory Service Standards Performance Reports - there are some interesting observations. During that period, as shown in the image below, the regulator:

• received 171 applications
• completed 235 key information checks
• authorised 10 electronic money firms (one being an upgrade from payment institution authorisation [InterPay Limited] and another which subsequently withdrew its authorisation in 2022).
• authorised /registered just 7 payments firms, including a large portion being standalone open banking firms (i.e. AISP and PISP)

The data in the first two bullet points comes the section within the reports headed Payment Firms (Payment Institutions, Electronic Money Institutions, Small Electronic Money Institutions & Money Transmission Businesses) & Bureaux de Change Authorisations.  Unfortunately the regulator's statistics for Bureaux de Change do not show the date a firm was authorised/registered.  Further, in the absence of more detailed data, it is possible (if not probable) that there is some double counting here.  

The data in the last two bullet points comes from the regulator's registers. 

Based on the numbers of firms authorised/registered versus applications received, one might have a few questions about the throughput of applications at the Central Bank.  However, there is no point speculating or over analysing the limited information available in the public domain.  What we need to do so is publication of substantial, independent and detailed information about the authorisation process and deeper and richer metrics. 

What is fair to say is that since since 2017, when Ireland had just two electronic money firms, that number has swelled 12 fold to the start of February 2024. Over the same period, the number of payments firms (authorised and registered) has jumped from 10 to 25 in total (21 authorised and 4 registered). More impressive is the rapid but seemingly controlled growth of quality digital asset firms totaling 11 from July 2022 to the end of last year.

We have added, with a very warm welcome, the following to the ‘Ireland’s Regulated Fintech Ecosystem (Payments & Crowdfunding)" Map Version 2:

1. Payoma Ireland Limited (authorised electronic money institution)
2. Bridge Peer Financial Limited trading as Property Bridges (authorised crowdfunding services provider)
3. Slua Ventures Ltd t/a Spark Crowdfunding (authorised crowdfunding services provider)

 
Payoma has also been added to our other regulated fintech map, Version 14, showcasing emoney and payments firms only.

Ireland is now home to 62 authorised or registered fintech across emoney, payments, open banking and crowdfunding.

​Payoma was authorised as an electronic money institution on 3 November 2023, and in addition to electronic money services is authorised to provide payment services 3a, 3b, 3c and 5. 

It is 100% owned by Payoma Limited in the UK which is authorised as an emoney firm by the Financial Conduct Authority. Payoma continues a trend of firms happy to go on the record about their positive experience of dealing with Ireland’s national competent authority, the Central Bank of Ireland saying in a statement “Our heartfelt gratitude extends to the entire team at the Central Bank of Ireland for their unwavering support and belief in the potential of our project. Their guidance has been invaluable, and it is with their assistance that we have realized this ambitious goal.”

Property Bridges and Spark Crowdfunding, both authorised by the cut-off date of 10 November 2023 join Seedrs Europe Limited as the only locally authorised crowdfunding service providers. 

Further Reading:

• Release of version 13 of the Regulated Fintech Emoney & Payments Map 

Sign-up to the Fintech Ireland Newsletter here to keep up to date with Irish fintech news, follows us on Twitter and follow the Fintech Ireland's Linkedin Page.  If you are first connections with Peter Oakes, you can also join the Fintech Ireland Group on Linkedin.

On 20 April 2022 (Central Bank of Ireland run date 21 April 2022), the Irish regulator authorised Booking Holdings Financial Services International Limited as an electronic money institution.  The authorisation comes 21 months following its incorporation on 17 July 2020.

The company, in addition to emoney, is authorised to provide payment services 3b, 3c and 5.  These allow the company to:

*  (3) Execution of payment transactions, including transfers of funds on a payment account with the user’s payment service provider or with another payment service provider:

• 3 (b) Execution of payment transactions through a payment card or a similar device;
• 3 (c) Execution of credit transfers, including standing orders

*  5. Issuing of payment instruments and/or acquiring of payment transactions

Ireland is now home to 19 authorised electronic money institutions, 20 authorised payment institutions and 4 standalone account information service providers. We have updated our regulated fintech Map to version 7.0 where we showcase these firms.

Our Peter Oakes spoke with Charlie Taylor of the Sunday Business Post on the authorisation of emoney and payment services firms and the issues firms were facing getting authorised in Ireland.  See Charlie's article of 10 April 2022 titled Defensive attitude of Central Bank putting off fintech investors.



In the article Peter Oakes said:

• ​Speaking to the Business Post, Peter Oakes, a former Central Bank enforcement director and founder of Fintech Ireland, an industry group, said some companies which had sought authorisation through the Irish regulator had found it difficult to deal with.
• “The Central Bank is at times coming across as unnecessarily defensive and surprisingly unprepared for meetings with applicants. Wrong or right, this is a situation which has developed and one the regulator is not sufficiently in front of,” he said.
• Oakes suggested that radical changes were not required to right the current situation.
  “A handful of straightforward enhancements should not only solidify the regulator’s objectives but create a better-informed industry. At the very least it would make clear whether Ireland is a ‘go-to’ effective regulatory jurisdiction for innovation and should prevent the state scoring an own goal by losing out on quality firms moving here because of the current situation,” he said.
  The Central Bank admitted in a statement that authorisation could take time, but said operating a robust authorisation process was “solely aimed at protecting consumers and investors”.

A trawl through the minutes of the Central Bank of Ireland's Commission minutes makes for interesting reading on this topic.  

On 7 December 2021 (not published until 8 February 2022), the record of minutes noted that:

• [Central Bank's Ed Sibley] a sizeable pipeline of change across multiple sectors, including authorisation activity, such as a high volume of Payment Institution/E-Money Institution authorisations. Work continued with applicant institutions on improving the quality of submissions.  in particular with regard to risk and compliance frameworks.
• One member asked if there were any particular trends emerging concerning authorisations.
• Mr Sibley responded that there continues to be very significant change across many sectors. For banking specifically there was a significant growth in international banking sector here because of Brexit, with very significant growth in size, complexity and levels of employment.
• [Central Bank's Derville Rowland added that] "She also noted the establishment of a new type of entity, virtual asset service providers (VASPs), which were now required to register with the Bank for the purposes of anti-money laundering (AML)​."  

​On 1 March 2022 (not published until 19 April 2022, the day before Bookings Holding was authorised), a partially omitted record of minutes dealing with the Authorisation Process (involving Mary Elizabeth McMunn and Colm Kincaid) was released, the published minutes noted that:

• Pipeline levels have remained consistently high and not all applications convert to supervised firms.
• the Bank substantially meets its published service standards across the various sectors.
• Reprioritisation of supervisory resources into authorisation work has been a key response to authorisation challenges; however, this is not without risk. 
• Queries were raised in relation to some external impressions that securing authorisation in Ireland can be more onerous than other jurisdictions, and whether there was benchmarking undertaken. Other queries focused on whether post-Brexit authorisation applications had peaked and on the Bank’s engagement with advisors to applicant firms and challenges with ensuring relevant board level oversight within newly authorised entities.
• ​In response, it was noted that the Bank applies EU standards and norms to its authorisation process, but was seeking to be forward looking in its approach; it wanted resilient firms that can cope with changing circumstances, and that is the robustness of the approach that is taken. It was noted that there was a strong drive at EU level to have rigorous authorisation processes and a strong drive for substance. In relation to the number of applicants, this was not expected to fall off and would in all likelihood increase. While there were levels of engagement with advisors, it was essential to get to the institutions themselves. Early engagement with some of the firms at expression of interest stage was showing a stronger understanding of the Bank’s expectations. In terms of board representation, this was a real and genuine challenge and it was a wider challenge for the State to make sure the expertise is there.
• The Commission noted the update and agreed to keep under consideration how best to support this work.

Visit our Fintech Ireland Maps page for more information about the fintech and regtech companies we map.

Other Reading:

1) Irish Times Article 20 March 2022: https://www.irishtimes.com/business/financial-services/winklesvoss-twins-secure-irish-e-money-licence-for-gemini-payments-1.4831606
2) Linkedin Post 20 March 2022: https://www.linkedin.com/posts/peteroakes_paymentservices-facebook-cryptoasset-activity-6911588283806277632-GaM0