Small Payment Institution (SPI) - how to choose the right technology provider and comply with AML rules?

As of today (03.02.2022,) there are 120 active companies in the Polish SPI Register. Dozens more wait for the registration process to be finished, so they can start their operations. Although the SPI market in Poland exists only since 2018, its development possibilities are already looking promising. It is worthwhile for entrepreneurs seeking SPI status to use the best providers of new technologies to make their companies operate more efficiently, quickly, and effectively.

Bartosz Sajewski

Small payment institution (SPI) - how to choose the right technology supplier and be AML compliant?

As of today (03.02.2022,) there are 120 active companies in the Polish SPI Register. Dozens more wait for the registration process to be finished, so they can start their operations. Although the SPI market in Poland exists only since 2018, its development possibilities are already looking promising. It is worthwhile for entrepreneurs seeking SPI status to use the best providers of new technologies to make their companies operate more efficiently, quickly, and effectively.

Small Payment Institution (SPI)

Small Payment Institution (SPI) is a solution introduced by the amendment of the Payment Services Act in connection with the implementation of the PSD2 Directive. Thanks to that, it is easier to provide payment services on a smaller scale. It means lesser regulatory requirements for the companies that will eventually scale up their operations but want to “test the water” first. Regulatory bodies recommend this solution primarily to various fintech start-ups, but not only - it can also be used by currency exchanges, lenders, insurance payment points, or companies sending parcels.

In Poland, an SPI, per Article 2(17b) of the Payment Services Act, means a natural person, a legal person, and an organisational unit which is not a legal person, but which is granted legal capacity by the Act, entered in the register of payment services providers and electronic money issuers, conducting activity in respect of any payment service other than the payment initiation service (PISP) or the account information service (AISP). However, the average of the preceding 12 months' total amount of payment transactions executed by the small payment institution, including agents through which it provides payment services, shall not exceed the equivalent of EUR 1.5M per month.

SPI development thanks to new technologies

Although a Small Payment Institution has its limitations (it may only operate in Poland, and its average turnover should not exceed EUR 1.5 million per month), there is no denying that the opportunities for the development of this sector in Poland are enormous. Although the potential value of this segment is yet to be estimated, the rapid increase in the registration of MIPs (from 25 entities in 2019 to 120 today) proves that many entrepreneurs are willing to provide these types of services.

The factor that may determine the future of Polish MIPs and their place on the map of the Polish fintech industry is the use of new technologies. Although Small Payment Institutions are subject to fewer regulatory requirements, they still need to meet several legal obligations. These include risk identification, verification of B2B and B2C customers based on AML regulations, collection of transaction information, assessment, and monitoring of business relationships... The examples are endless.

Usually, in the early stages of development SPIs are supported by outside advisors or law firms, but they can’t provide the company with a range of important technological solutions. Today, this is a task for technology providers. They are the ones who present the company with the tools to make it easier, cheaper, and more efficient to determine the degree of customer risk, collect data, verify the identity, or provide information on transactions carried out within the business relationship. 

SPIs and AML compliance

It is important to note that SPIs, prior to obtaining the licence, were probably not obliged to comply with AML regulations, thus most of them have to build AML procedures from scratch. Choosing the right AML technology provider may prove to be a key aspect in building a procedure that, in addition to being technologically efficient, will also be easy to use for both client and contractor.

AML regulations can be found in the Act of 1 March 2018 on anti-money laundering and terrorism financing. In the current legal state, the catalogue of obliged institutions has been expanded in relation to the previous wording of the Act.

Table of content

  • Small payment institution (SPI) - how to choose the right technology supplier and be AML compliant?
  • Small Payment Institution (SPI)
  • SPI development thanks to new technologies
  • SPIs and AML compliance
Bartosz Sajewski