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Permission for Payment Services in Germany

In 2007, Payment Services Directive 2007/64/EC was adopted in order to create an EU-wide single market for payments. After being transposed in Germany in 2009, the provision of payment services in Germany was subjected to an independent supervisory regime, the Payment Services Supervision Act (ZAG). In accordance with its Section 8(1), a license from the Federal Financial Supervisory Authority (BaFin) is required in order to provide payment services in Germany commercially or on a scale that requires commercially equipped business operations.

High requirements for German Payment Service Permission

Providers intending to offer payment services must meet numerous requirements. Depending on the activity, an adequate initial capital of between EUR 20,000 and EUR 125,000 is required. It may even be higher if additional activities are to be provided that require licensing under the Banking Act. In addition, managers and owners of material holdings of the company must be reliable and professionally able to perform the intended transactions. Furthermore, special requirements on equity must be met, and appropriate risk management and internal control procedures must be installed. Therefore, payment institutions require comprehensive supervisory advice at an early stage prior to starting their business. Our German attorneys specializing in banking law and capital markets law represent these clients within the licensing procedures of the responsible German supervisory authorities.

Easier access for payment service providers from other EEA Member States

Companies already holding a license for operating payment services in a Member State of the European Economic Area may also provide payment services in Germany by using the "European Passport" if certain minimum requirements are met. No German license application of its own is needed then. Rather, the homeland supervisory authority must be notified about the intention of providing payment services in Germany as well. Our German attorneys specializing in banking law and capital markets law comprehensively advise EEA service providers when entering the German payments market.

Payment services come in many forms

Some non-banks are also offering banking services, which may go somewhat unnoticed. There are various transactions that are subject to BaFin licensing: on the one hand, these are the classical payment services such as deposit and pay-out transactions, where payment accounts are offered, or the payment transactions involving transfers, direct debit, or payment card transactions. On the other hand, there is money remittance where amounts are forwarded upon customer order to a third party in cash or non-cash transactions. In those three-party relationships, the scope of application of the remittance business is rapidly affected, where brokers or mediators receive or forward payments of parties that they brought together. Cologne Regional Court’s Lieferheld judgment of September 29, 2011, Case 81 O 91/11, is a well-known example in this respect. It should be examined in these cases, whether a legal exception is applicable or whether operation of a remittance business can be bypassed by clever legal design.

We represent companies before supervisory authorities in Germany

You want to conduct license-based activities in Germany or engage the German regulatory authorities? Our specialized German banking attorneys assist you in drafting and filing of license applications as well as coordinating your German banking business with BaFin and the German Central Bank. Attorney Dr. Annette Wagemann and Attorney Dr. Sebastian von Allwörden (both Certified Specialists for Banking and Capital Markets Law) are looking forward to addressing every question you might have regarding financial regulation and payment services in Germany. You can reach them via e-mail ( or by phone (+49 (0)69 / 76 75 77 80).




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