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Opening Bank Account For Major Payment Institution (MPI)


  

Navigating the complexities of opening bank accounts for a Major Payment Institution (MPI) can be daunting, but it's a crucial step towards ensuring operational efficiency and payment route diversity. This guide aims to demystify the process, focusing on the importance of selecting the right types of accounts and adhering to regulatory requirements, specifically for entities operating within or targeting markets that involve large-scale payment processing.

 

A Major Payment Institution is a significant player in the financial services sector, providing payment services on a larger scale than smaller entities. These institutions are subject to stringent regulatory oversight, often by bodies like the Financial Conduct Authority (FCA) in the UK or the Monetary Authority of Singapore (MAS), to ensure the integrity and stability of financial transactions.

 



bank-account-for-MPI

 


Why MPI Needs An Operational Bank Account?

 

An operational bank account is vital for an MPI to manage its own funds separately from those of its customers, which is essential for both regulatory compliance and operational integrity. Such accounts are typically used for managing day-to-day business expenses, including employee salaries, office rentals, utility bills, and other overhead costs.

 

Operational accounts are strictly for the institution's funds and must not be used for handling client monies. Instead, MPIs are required to maintain distinct accounts for safeguarding client funds and processing client transactions, namely safeguarding accounts and client money accounts.

 

The process of opening an operational account involves gathering business documentation, identifying ultimate beneficial owners (UBOs), and completing due diligence processes similar to those for conventional businesses, albeit with additional regulatory scrutiny.

 

For assistance in opening an operational bank account for your MPI, you can fill out our contact form and we will share a list of banks that can open such account.

 

 

Opening Safeguarding Account For MPI

 

A safeguarding account is designed to protect customer funds by keeping them separate from the institution's operational funds. This is a critical requirement for MPIs to ensure customer protection and trust. Opening a safeguarding account requires partnering with a duly licensed banking institution and navigating the regulatory landscape to meet both local and international standards.

 

For MPIs operating in various jurisdictions, the challenge often lies in meeting diverse regulatory requirements and securing approval for safeguarding accounts. Our expertise spans working with banks globally to facilitate the opening of multi-currency safeguarding accounts for MPIs, ensuring compliance and operational efficiency. If you would like to explore safeguarding account opening for your MPI, contact us.

 

 

Opening Client Money Account For Major Payment Institution

 

Client money accounts, also known as third-party payment accounts or correspondent accounts, are essential for MPIs to process payments on behalf of their clients efficiently. These accounts enable the institution to offer comprehensive payment services, including currency exchange and international payments, enhancing their service offerings to clients worldwide.

 

Newly established MPIs may initially opt for pooled accounts due to their lack of a business track record. However, correspondent accounts offer the advantage of issuing named client IBANs, allowing clients to transact under their own company names, which enhances transparency and trust.

 

We strongly advise pursuing client money accounts with API connectivity to facilitate efficient, scalable payment processing that meets the evolving needs of your business and your clients.

 

If you would like to get an up to date list of banks that can offer Client Money Accounts for your MPI, fill out our contact form and we will send it to you by email.

 

 

Standard Onboarding Pack for Major Payment Institution

 

To streamline the onboarding process with banks, MPIs should prepare a comprehensive pack of documents and information, including:

 

- Certificate of Registration or Incorporation

- Memorandum and Articles of Association or equivalent corporate documents

- Official list of directors and shareholders

- Identification documents for all UBOs and authorized signatories

- Proof of business trading address

- Regulatory license number

- Financial statements or business bank statements

- AML/KYC/CDD policies and procedures

- Recent external AML audit reports

- Detailed information on AML governance arrangements, customer due diligence files, and customer risk assessment methodologies

- Periodic external AML audits may be required

 

Adhering to the bank's requests and providing detailed information will enhance the likelihood of a successful onboarding process for your MPI.

 


Conclusion

 

Opening and managing bank accounts for a Major Payment Institution involves navigating a complex regulatory environment and meeting specific financial and operational requirements. By establishing operational, safeguarding, and client money accounts, MPIs can ensure regulatory compliance, protect customer funds, and facilitate efficient payment services. The process demands meticulous preparation and understanding of both regulatory obligations and banking procedures.

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