THE TASK
The challenge
The client was an established payment services provider with an international team and a working product. The company was serving European customers under a partner’s licence, but the limitations of that model had become increasingly clear. Operating under a third-party licence restricted the product offering, geographic expansion and commercial margins. To issue electronic money, safeguard customer funds and scale its payment services across Europe, the company needed its own EMI licence.
The client selected the Czech Republic early in the project because it offered a strong balance of operating costs, authorisation timelines and the ability to passport the licence into selected EU and EEA markets. The main risk was not the choice of jurisdiction. It was the regulatory process itself. Every additional round of questions from the Czech National Bank could add another 1–2 months to the authorisation timeline, delay the commercial launch and leave investors waiting for the licence.
Key requirements:
- obtain an EMI licence in the Czech Republic within a predictable timeframe
- complete the CNB authorisation process without multiple rounds of regulatory questions
- establish the required corporate structure and local presence in the Czech Republic without unnecessary costs
- gain direct access to the company’s target European markets and customer segments through its own EMI licence
Our Approach to EMI Licensing in the Czech Republic
Many delayed EMI authorisations begin in the same way: the applicant submits an incomplete or insufficiently developed application and then attempts to correct it in response to the regulator’s comments. AMS took the opposite approach. Before filing the application, we brought the documentation to a standard designed to minimise the number of questions raised by the Czech National Bank.
Regulatory Analysis and Project Structuring
At the start, we carried out a gap analysis of the business model against the requirements of the Czech Payment System Act and CNB guidance. We then agreed on the scope of services, the corporate structure, capital requirements and the composition of the management team.
The result was a project roadmap with clearly assigned roles and realistic timelines.
Preparation of the EMI Licence Application
The AMS team prepared the complete EMI application package, including:
- a business plan and programme of operations supported by a three-year financial model
- AML/CFT policies, KYC and CDD procedures, and a risk assessment
- a safeguarding model for the segregation of client funds
- governance documentation, including the organisational structure, internal controls and compliance
- IT security, business continuity and incident management documentation
- fit and proper files for directors, senior managers, shareholders and ultimate beneficial owners
Pre-Submission Review
Before submission, we reviewed the entire package using a regulator-focused methodology. Each document was checked against current CNB practice and the typical comments raised in previous authorisation procedures.
Weak points were addressed before submission, not after the regulator’s first letter.
Managing the Dialogue with the CNB
After submission, the AMS team handled all communication with the regulator: monitoring the status, preparing responses to questions and coordinating any updates with the client.
The only round of CNB questions was completed within the required deadline, without suspension of the application process.
RESULT
EMI Licence Granted After Single Round of CNB Questions
The authorisation process took 8 months from the submission of the application to the company’s entry in the CNB register. The CNB raised only one round of questions, compared with the two or three rounds typical for EMI applications. For the client, this meant saving at least six months and keeping the project budget predictable.
The company now issues electronic money and keeps client funds separate from its own funds, as required by law. It is also preparing to passport its services into other EU countries. AMS continues to support the company after licensing, including with compliance, regulatory reporting and accounting based on the separate treatment of client funds.
Client feedback:
We had planned for a two-year process and a dedicated person to manage correspondence with the regulator. Neither was needed. The questions we were most concerned about had already been addressed at the documentation stage.
