Registration of a Small-Scale Payment Services Provider in the Czech Republic

Are you a foreign FinTech or payment company looking to enter the EU market? This practical guide from ARROWS, a leading Czech law firm in Prague, EU, provides clear, step-by-step instructions for registering as a Small-Scale Payment Services Provider (SSPSP). Our English-speaking lawyers will explain the entire process with the Czech National Bank, helping you avoid common pitfalls and launch your business successfully. 

Need advice on this topic? Contact ARROWS Law Firm at office@arws.cz or +420 245 007 740. Your question will be answered by "Mgr. Marek Hučík", an expert on the topic.

What is a Small-Scale Payment Services Provider (SSPSP)?

The SSPSP is a registration category under Czech law for legal entities providing payment services on a limited scale. It is an ideal strategic entry point for businesses wanting to establish themselves in the Czech market before committing to a full EU Payment Institution license.

This license, granted by the Czech National Bank (CNB), allows you to provide services like cash deposits and withdrawals, direct debits, credit transfers, card payments, and money remittance. However, it excludes "Open Banking" services like Payment Initiation Services (PIS) and Account Information Services (AIS).

What are the main advantages of an SSPSP registration?

For many foreign companies, the SSPSP framework offers significant benefits. The most notable is the lower barrier to entry, as it does not have the high statutory initial capital requirements of up to EUR 125,000 that apply to full Payment Institutions. This makes it highly accessible for startups and SMEs.

The SSPSP license allows you to launch your services, build a customer base, and generate revenue in a fully regulated environment. Operating as a CNB-supervised entity provides an immediate stamp of credibility, which is invaluable when building partnerships with banks and payment processors.

What are the limitations I need to know?

The SSPSP license comes with two fundamental limitations. First, the average monthly turnover of payment transactions cannot exceed EUR 3 million, which is a rolling annual limit of EUR 36 million. Exceeding this requires upgrading to a full Payment Institution license.

Second, the license is valid for providing services only within the Czech Republic. It does not grant "passporting" rights to operate freely in other EU member states. Our international law firm, operating from Prague, European Union, can provide detailed legal opinions on how to structure your cross-border operations. Get tailored legal solutions by writing to office@arws.cz.

Legal risk and potential issues	How ARROWS helps
Misunderstanding the geographic scope of the license, leading to unauthorized cross-border activities.	Legal analysis – We provide a clear legal opinion on the operational limits of the SSPSP license to ensure you remain compliant. Want to understand your legal options? Email us at office@arws.cz.
Accidentally exceeding the transaction volume cap, resulting in regulatory breaches and potential penalties.	Legal consultations – We offer ongoing legal support to help you monitor your transaction volumes and plan a timely license upgrade. Need legal help? Contact us at office@arws.cz.
Offering services not permitted under the SSPSP license, such as PIS or AIS.	Compliance review – Our lawyers will review your service portfolio to ensure it aligns with the SSPSP framework, preventing fines and penalties. For a compliance check, write to us at office@arws.cz.

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How does the Czech National Bank (CNB) evaluate applications?

The CNB is the sole supervisory authority for the Czech financial market. Its primary mission is to maintain financial stability and ensure robust consumer protection. The CNB’s approach is proactive and risk-based; it evaluates every application on how the new entity could impact the market.

Your application must therefore demonstrate that your business is well-managed, responsible, and a low-risk participant. A successful application requires mastering the key legal acts, including Act No. 370/2017 Coll., on Payments, and several related decrees that specify the application's content and operational rules.

FAQ – Legal tips about the CNB application

• What is the CNB's main priority when reviewing an application?
  The CNB's main priority is risk management. Your application must prove that your business model is not only commercially viable but also includes a robust framework for compliance, risk mitigation, and the prevention of illicit financial activity. For help drafting documentation to prevent fines, contact us at office@arws.cz.
• Can I consult with the CNB before submitting my application?
  Yes, the CNB offers an optional but highly recommended pre-application consultation. This is a valuable opportunity to introduce your project, clarify expectations, and build a professional relationship with the regulator. Our lawyers are ready to represent you in discussions with public authorities – email us at office@arws.cz.

What do I need to prepare for my application?

A successful application dossier provides a complete picture of your business. You must be a legal entity with a registered office in the Czech Republic. The CNB also conducts a rigorous "fit and proper" assessment of all founders and senior managers.

For each key individual, you will need a valid passport, proof of address, birth certificate, criminal record extracts from your home country and the Czech Republic, and verifiable proof of the origin of funds. ARROWS lawyers can help you prepare all legally required documentation.

The business plan is the single most critical component of your application. It must be a regulatory document, not a marketing pitch, with a primary focus on the Czech market, a detailed description of your services, and robust financial projections for the first three years.

Legal risk and potential issues	How ARROWS helps
A generic business plan that is not tailored to the Czech market, leading to immediate rejection by the CNB.	Business plan drafting – We help you prepare a compelling business plan that meets the CNB's specific requirements and highlights your commitment to compliance. Do you need a business plan prepared? Contact us at office@arws.cz.
Failure of key personnel to meet the CNB's strict "trustworthiness" (důvěryhodnost) standard.	'Fit and proper' assessment – We guide you in preparing all personal documentation and completing the CNB's official assessment forms to demonstrate integrity. For a confidential consultation, write to us at office@arws.cz.
Submitting incomplete or inconsistent documentation, causing significant delays in the application process.	Application dossier review – We meticulously review every document for accuracy and completeness, ensuring a smooth submission process. For immediate assistance, write to us at office@arws.cz.
A weak or boilerplate Anti-Money Laundering (AML) policy that fails to address specific business risks.	Preparation of internal policies – We draft a comprehensive, customized AML/CFT framework and other internal policies to demonstrate your operational readiness. Get tailored legal solutions by writing to office@arws.cz.

What is the next step?

The application must be submitted electronically to the CNB, either via a Data Box (datová schránka) or a signed email, along with a CZK 10,000 administrative fee. The review period typically lasts between 6 and 9 months, during which the CNB may request additional information.

Once approved, your company is entered into the public register and can legally begin operations. However, obtaining the license is just the beginning. As a registered SSPSP, you are subject to continuous supervision and ongoing reporting obligations to the CNB, including submitting quarterly financial and operational reports.

How can ARROWS help you succeed?

The path to regulatory approval in the Czech Republic is complex and demands legal precision. As a leading Czech law firm in Prague, EU, with over 10 years of experience building our ARROWS International network, we have a proven track record of guiding foreign clients through this intricate process. We support over 150 joint-stock companies and 250 limited liability companies across 90 countries.

Our services include the preparation of internal company policies, drafting all legally required documentation, and representation before the CNB. We transform the regulatory burden into a clear path to market entry, ensuring your application is not just compliant, but compelling.

Do not let regulatory hurdles delay your entry into the dynamic Czech FinTech market. Do not hesitate to contact our firm for a consultation on your business goals. Email us today at office@arws.cz.

FAQ – Most common legal questions about SSPSP Registration

• How long does the SSPSP registration process usually take?
  The process with the Czech National Bank typically takes 6 to 9 months but can be longer if the application is complex or founders are non-EU residents. Proper preparation is key to avoiding delays. For assistance with your application, write to us at office@arws.cz.

• What is the most important document in the application?
  The business plan is the most critical component. It must be detailed, commercially viable, and demonstrate a strong focus on the Czech market and robust compliance procedures. Need your business plan reviewed by an expert? Contact us at office@arws.cz.

• Do I need to have a physical office in the Czech Republic?
  Yes, the legal entity applying for the SSPSP license must have its registered office and head office located in the Czech Republic. Our law firm in Prague, European Union, can assist with all corporate setup requirements. Email us at office@arws.cz.

• What are the initial capital requirements for an SSPSP?
  Unlike a full Payment Institution, there is no high statutory minimum capital requirement for an SSPSP, which significantly lowers the barrier to entry for startups and SMEs. For detailed financial guidance, get in touch with our legal team at office@arws.cz.

• Can ARROWS help if the CNB asks for more information during the review?
  Absolutely. Our team has extensive experience communicating with the CNB. We can help you prepare timely, accurate, and professional responses to any regulatory queries to keep your application on track. For representation before public authorities, contact us at office@arws.cz.

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