SPI Licence vs API Licence: Which FCA Authorisation Do You Need?

What Is the Difference Between an SPI Licence and an API Licence?

The Financial Conduct Authority (FCA) offers two authorisation routes for UK money transfer operators: a Small Payment Institution (SPI) registration and an Authorised Payment Institution (API) licence. The key difference is transaction volume — SPIs process up to €3 million per month, while APIs handle unlimited volumes with stricter requirements.

Choosing the right authorisation type affects your capital requirements, regulatory obligations, application timeline, and the remittance software features you need from day one. This guide breaks down both options to help you decide.

Small Payment Institution (SPI) — Overview

An SPI registration is the entry-level FCA authorisation for money transfer operators. It is designed for businesses processing lower volumes while they build their customer base and operational capabilities.

SPI Key Requirements

• Transaction Limit — Up to €3 million in payment transactions per month (average over 12 months)
• Minimum Capital — €20,000 (approximately £17,000) held at all times
• Safeguarding — Not required by regulation, though recommended as best practice
• Application Process — Registration (simpler than full authorisation). Typically 3–6 months.
• Passporting — Cannot passport services to other EEA countries
• FCA Fee — £500 application fee

Who Should Apply for an SPI?

SPI registration is ideal for startups, new MTOs, and businesses testing the UK remittance market. If you are launching your first money transfer business and expect to process under €3 million monthly in your first 1–2 years, SPI is the right starting point. Remitz offers a dedicated SPI licence applicant plan at £79/month to help you prepare.

Authorised Payment Institution (API) — Overview

An API licence is the full FCA authorisation for payment institutions. It is required for businesses that exceed the SPI transaction threshold or want to passport services internationally.

API Key Requirements

• Transaction Limit — No upper limit on transaction volumes
• Minimum Capital — €125,000 (approximately £107,000), or a calculated percentage of monthly payment volumes (whichever is higher)
• Safeguarding — Mandatory. Customer funds must be held in segregated accounts at an authorised credit institution or covered by insurance/guarantee.
• Application Process — Full authorisation with detailed business plan, compliance manual, and IT systems assessment. Typically 6–12 months.
• Passporting — Can passport services to EEA countries (subject to post-Brexit arrangements)
• FCA Fee — £1,500 application fee

Who Should Apply for an API?

API authorisation is for established MTOs processing above €3 million monthly, businesses planning rapid growth, and operators wanting to serve customers across multiple European markets. If you already have a proven business model and sufficient capital, applying directly for API status may save time versus upgrading from SPI later.

SPI vs API: Side-by-Side Comparison

Can You Upgrade from SPI to API?

Yes. Many UK money transfer operators start with SPI registration and upgrade to full API authorisation as their business grows beyond the €3 million monthly threshold. The FCA expects operators to monitor their transaction volumes and apply for API authorisation before consistently exceeding the SPI limit.

With Remitz, upgrading is seamless — your platform configuration, compliance documentation, corridors, and customer data carry over when you move from the SPI plan to a full operational plan. There is no migration required and no downtime.

AML/KYC Requirements: SPI vs API

Both SPIs and APIs must comply with the UK Money Laundering Regulations 2017. The AML/KYC requirements are the same regardless of authorisation type:

• Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD)
• Ongoing transaction monitoring
• Sanctions screening against HM Treasury and global watchlists
• Suspicious Activity Reporting (SARs) to the National Crime Agency
• Record keeping for minimum 5 years
• Annual AML/KYC training for all staff

Remitz includes automated AML/KYC compliance tools in every plan, with integrated providers including Onfido, Yoti, and Trulioo for identity verification and sanctions screening.

What Software Do You Need for Each Licence Type?

Both SPI and API operators need money transfer software that supports FCA compliance, transaction processing, and customer management. The difference is scale:

• SPI operators — Need a platform that handles compliance, basic corridors, and customer onboarding. The Remitz SPI plan (£79/month) provides a sandbox environment for pre-licence preparation, upgrading to the Starter plan (£199/month) when authorised.
• API operators — Need enterprise features including agent management, unlimited corridors, advanced reporting, and higher throughput. The Remitz Growth (£349/month) or Enterprise (£599/month) plans are designed for this.

How to Decide: SPI or API?

Ask yourself these questions:

1. What is your projected monthly transaction volume in year 1? — If under €3 million, start with SPI.
2. Do you have €125,000+ in available capital? — If not, SPI requires only €20,000.
3. Do you need to operate across multiple European countries? — If yes, you need API for passporting rights.
4. How quickly do you want to launch? — SPI registration takes 3–6 months vs 6–12 months for API.
5. Is this your first money transfer business? — Most first-time operators start with SPI and upgrade when ready.