Why you should choose Ireland as a location for payment institutions?

Ireland has slowly but surely established itself as an alluring destination for businesses in the Fintech sector.

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From a solid regulatory framework to an advanced financial services ecosystem, Ireland’s financial technology sector is booming right now and is home to a surprising number of reputable domestic and international payment institutions. Let's take a closer look at the reasons behind this below.

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Robust regulatory framework

One of the strongest cases for choosing Ireland as a location for payment institutions is its strong regulatory framework. In Ireland, all payment institutions are regulated through the Payment Services Directive 2015/2366.This directive is geared towards innovation and competition within the industry, which has encouraged substantial growth in the sector.

Ireland is the perfect hub for passporting and third-country firms

Any payment institutions in Ireland have the ability to passport to other EEA Member States for business or cross-border establishment. This is a two-way street, where institutions from the other EEA Member States can freely passport into Ireland, too. If a payments business that is outside of the EEA is looking to enter Ireland, they can do so by obtaining passport rights through a number of means.

Ireland employs robust authorisation requirements

For payment institutions looking to become authorised in Ireland, there are a number of requirements that must be met. Factors include an expectation that they have substance in Ireland, are suitably funded, are in a stable position to run a payment institution and that they comply with fitness and probity requirements.

These requirements encourage healthy competition in the sector without diluting the payment institutions with weak finances or business plans. In short, the authorisation requirements promote stronger payment institutions in Ireland.

In terms of substance, the Central Bank of Ireland (CBI) looks to ensure that payment institutions have the ‘heart and mind’ to be in Ireland. This means that the CBI will be looking for the applicant to have established management and a realistic organisational structure in the country. No one has to outright reside in Ireland, although the people responsible for the core duties of the payment institution should live there.

Payment institutions must also have sufficient capital  before they will be authorised by the CBI. Another aspect of this will be the ability to provide information about how the payment institution intends to function. This should include things like a business plan, dealing with security concerns and any structural organisation.

The final stage before the authorisation process is looking into the payment institution's fitness and probity. All members of the institution that will hold a ‘Pre-Approval Controlled Function’ role will be required to complete a Fitness and Probity Individual Questionnaire.

The authorisation process

The final stage for a payment institution in Ireland before setting up shop is the application for authorisation through the CBI. This process aims to act as a gatekeeper of sorts by ensuring that applicants meet the criteria set out previously. For a full rundown of this, the CBI has broken down their process<a href=”https://www.centralbank.ie/regulation/industry-market-sectors/payment-institutions/authorisation-process”>here</a>.

The five-stage authorisation process for payment institutions in Ireland is robust but relatively streamlined. The CBI makes the entire procedure as transparent as possible and provided all of the documentation is in order should not take more than a few months.

If you would like to know more about setting up as a payment institutions in Ireland, speak with our experts at Cosgrove Gaynard Solicitors today.

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