Payment aggregators connect merchants to acquiring banks and payment service providers through a common integration. They can simplify onboarding, payment processing and settlement. Whether they need a licence depends on the services they actually provide.
This article explains the main distinctions in the EU, UK and US and the contractual and compliance issues to assess before launch.
Regulatory information reviewed as of 14 November 2026.
A provider can perform regulated acquiring even without holding customer funds. Calling a business a gateway or working with a licensed bank does not, by itself, resolve the licensing question.
Aggregator, gateway or PayFac?
These commercial labels describe different models, but regulators look at functions and responsibilities.
Payment gateway
A gateway supplies technical infrastructure: payment APIs, encryption, authentication, routing and transaction data processing. Where merchants contract with a licensed acquirer that processes payments and settles directly with them, the gateway may remain outside the payment licensing perimeter.
That conclusion requires the gateway to provide only technical support rather than independently perform regulated payment services.
Payment facilitator (PayFac)
A PayFac typically works with an acquirer to enable sub-merchants to accept payments. It may onboard merchants, manage processing relationships, monitor transactions and participate in settlement.
Depending on its merchant contracts and responsibilities, the PayFac may itself provide regulated acquiring. The acquiring bank’s licence does not automatically cover an independent facilitator.
Payment aggregator
“Aggregator” is a broader term that may describe a PayFac, payment intermediary or technical platform connecting merchants to several PSPs. Its legal classification follows its actual role.
Which activities trigger licensing?
There is no single “payment aggregator licence” shared by all jurisdictions. A business may instead need payment institution, electronic money institution or money transmitter status.
The main questions are:
Who receives and transfers funds?
Collecting customer payments and distributing them to merchants may constitute acquiring, money remittance or another regulated service.
Who contracts to provide payment acceptance?
An aggregator that undertakes to accept and process merchant payments may provide acquiring even when a bank handles settlement.
Who maintains accounts or stored value?
Payment accounts and balances can create additional obligations. Issuing e-money requires a separate assessment.
Who initiates or executes payments?
These functions may be regulated independently of custody.
Is the role genuinely technical?
Software and data processing may fall outside regulation only where the provider does not independently perform regulated services.
A settlement ledger does not automatically constitute e-money. Equally, avoiding possession of funds does not automatically remove licensing requirements. Payment flows and contracts must be assessed together.
EU, UK and US: licensing compared
| Jurisdiction | Main framework | When authorisation may be needed | Exclusions and alternatives |
|---|---|---|---|
| European Union | PSD2 and national implementing law. | Acquiring, remittance and other regulated payment services. E-money issuance needs a separate assessment. | Technical service exclusion; narrow commercial agent exclusion; registered agency where permitted. |
| United Kingdom | Payment Services Regulations 2017; FCA supervision. | PayFac acquiring can be regulated even without holding funds or being the card scheme acquirer of record. | Genuinely technical services may fall outside regulation. SPI registration is available only where statutory conditions are met. |
| United States | Federal BSA / FinCEN rules and state money transmission laws. | Receiving and transmitting funds may trigger federal MSB requirements and state licensing. | The federal payment processor exemption is conditional. State exemptions must be assessed separately. |
EU: PSD2 exclusions and PSD3 / PSR reforms
PSD2, Directive (EU) 2015/2366, and national implementing legislation provide the principal EU framework.
Acquiring
Annex I, point 5 includes acquiring of payment transactions among regulated services. Acquiring involves contracting with a payee to accept and process payment transactions resulting in a transfer of funds to that payee.
An aggregator that contracts directly with merchants to provide this service may qualify as an acquirer even where another institution handles card scheme settlement. The analysis includes merchant agreements, processing responsibilities and settlement arrangements.
Technical service provider exclusion
Article 3(j) excludes certain supporting technical services where the provider never enters into possession of funds. Examples include data processing and storage, authentication, IT networks, data security and terminal maintenance.
This is not a general exemption for companies using APIs. Payment initiation and account information services are not excluded merely because they are technology-based. The provider must establish that its role is genuinely technical.
Commercial agent exclusion
Article 3(b) concerns agents authorised to negotiate or conclude sales of goods or services on behalf of only the payer or only the payee.
Payment processing alone does not establish the necessary commercial agency functions. Aggregators should not assume that collecting payments for merchants brings them within this narrow exclusion.
PI or EMI?
Regulated acquiring or money remittance may require Payment Institution (PI) authorisation. Issuing monetary value that meets the legal definition of electronic money may require Electronic Money Institution (EMI) authorisation.
A PI may maintain payment accounts within its authorised services without necessarily issuing e-money. We cover authorisation types and capital requirements in our article on EMI and payment institution licensing.
PSD3 and PSR
The European Parliament and Council reached a provisional political agreement on the new framework on 27 November 2025. The Council adopted its first-reading position in October 2026, followed by Commission communications on 3 November 2026.
As of 14 November 2026, PSD2 remains the principal applicable directive pending completion of the legislative process and commencement of the new framework. Applicants should consider forthcoming changes to governance, fraud prevention, operational risk and the relationship between PI and EMI regimes.
UK: the FCA’s approach to PayFacs
The Payment Services Regulations 2017 govern UK payment services. The FCA’s PERG 15 guidance expressly addresses payment facilitators and acquiring.
The acquiring definition may capture master merchants and PayFacs contracting with merchants to provide acquiring services. This can apply even where the provider is not the acquirer of record under card scheme arrangements or does not directly transfer funds to merchants.
A UK gateway supplying software to merchants already contracted with a licensed acquirer may remain outside the perimeter. If it assumes responsibility for providing acquiring, the result may change.
A business providing regulated services may need Authorised Payment Institution status or, if eligible, registration as a Small Payment Institution. SPI registration depends on statutory conditions, including transaction volumes; it is not an unrestricted alternative to full authorisation.
US: federal exemption and state requirements
US aggregators must assess both federal Bank Secrecy Act rules and state money transmission laws.
Under FinCEN rules, accepting funds or other value substituting for currency from one person and transmitting it to another person or location may constitute money transmission.
Certain payment processing activities can qualify for an exemption. FinCEN identifies four relevant conditions:
- The service facilitates purchases of goods or services or bill payments rather than money transmission itself.
- It operates through clearance and settlement systems admitting only BSA-regulated financial institutions.
- It is provided under a formal agreement.
- An agreement exists at least with the seller or creditor receiving payment.
The actual transaction structure determines eligibility. A processor using regulated bank and card settlement infrastructure may qualify; distributing funds outside those arrangements may produce a different outcome.
State requirements must be assessed separately. Definitions and exemptions for processors, authorised delegates and other intermediaries vary. FinCEN registration, where required, does not replace state licences.
Can a licensed partner replace your own licence?
A licensed partner can support several lawful models, but a commercial agreement does not automatically extend its licence to an independent business.
Technical provider
The aggregator supplies software and infrastructure; the licensed PSP contracts with merchants and performs regulated services. The aggregator may not need its own licence if it genuinely remains a technical provider.
Registered agent
Where permitted, an aggregator may act on behalf of a payment institution as a registered agent. Under PSD2, this involves registration, oversight and compliance requirements. The institution remains responsible within the applicable legal framework.
Outsourcing
A PSP may outsource technical or operational functions, subject to applicable governance, outsourcing and operational resilience requirements. Outsourcing does not automatically transfer the PSP’s regulatory responsibilities.
Independent PayFac
An aggregator independently providing acquiring or other regulated services may still require its own authorisation despite partnering with an acquirer.
Compliance, funds and merchant contracts
Licensing is only part of the assessment. Responsibilities must be consistent across payment flows, contracts and day-to-day operations.
Merchant onboarding and AML
Establish KYB, beneficial ownership checks, sanctions screening, risk classification and transaction monitoring. Apply enhanced checks to high-risk merchants where appropriate and allocate suspicious activity reporting responsibilities. For practical procedures, see our article on KYC and KYB for payment providers.
A technical provider does not necessarily have the same statutory AML duties as a licensed PSP, although contracts may assign compliance tasks.
Safeguarding
Where a regulated institution receives relevant payment funds, segregation or another permitted safeguarding method may be required. PSD2 Article 10 applies to institutions providing Annex I services 1–6.
Assess ownership and control of funds, reconciliation, settlement delays, refunds, chargebacks, reserves and insolvency protection. A reserve account alone does not determine regulatory treatment.
Merchant agreements
Identify who processes payments, holds funds and settles with merchants. Define permitted businesses, fees, chargeback liability, rolling reserve calculations and release conditions, suspension rights, data protection duties and liability for losses. We explain clauses against disguised third-party payments in our article on protecting acquirers and PSPs from transaction laundering.
PayFac agreements also need to reflect monitoring, reporting and financial obligations imposed by the acquirer and card schemes. See our article on payment facilitators, aggregators and responsibility for sub-merchants.
What to check before launch
Map payment flows
identify who receives, holds, controls and transfers funds.
Review contracts
determine who undertakes to provide acquiring and whether merchants contract directly with the licensed PSP.
Separate functions
distinguish technical services from regulated payment activities.
Test the proposed structure
assess technical provider, agency, outsourcing or independent PSP status in each target jurisdiction.
Allocate compliance
document onboarding, monitoring, safeguarding and incident responsibilities.
Prepare agreements
align PSP, merchant, outsourcing and data processing documents with the operational model.
Obtain a regulatory assessment
confirm whether authorisation or registration is required before launch.
A disclaimer saying that the company is not a PSP will not prevent regulation if its activities fall within the licensing perimeter.
Frequently asked questions
Does every aggregator need a licence?
No. A purely technical provider may operate without payment institution authorisation. Acquiring, remittance and other regulated services require a separate assessment.
Can a PayFac need authorisation without holding funds?
Yes. In the EU and UK, the provider’s acquiring responsibilities can trigger regulation even when settlement runs through a bank.
Does an aggregator always need an EMI licence?
No. EMI authorisation concerns e-money issuance. Acquiring or remittance does not automatically constitute issuing e-money.
Is a partnership with a licensed PSP enough?
Only if the actual structure supports the relevant legal model. A partnership alone does not authorise an independent business to provide regulated services.
Conclusion
Assess the business model before choosing a licensing structure. The decisive factors are the services promised to merchants, responsibility for processing and control of funds. Clear contracts and operational boundaries help establish whether an aggregator needs its own authorisation or can work as a technical provider, agent or outsourced partner.
LegalBit advises payment businesses on PI and EMI licensing, PayFac structures, merchant agreements and AML/KYB compliance.
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See also: Payment Facilitators, Aggregators and ISOs; EMI and Payment Institution Licensing; KYC and KYB for Payment Providers; Merchant Agreements and Transaction Laundering. Services: legal support for fintech and payments.
Sources and Legal References8 documents
- Directive (EU) 2015/2366 — Payment Services Directive (PSD2)
- European Commission — Payment Services
- FCA — PERG 15: Payment Services Regulatory Perimeter
- FCA — Payment Services and Electronic Money Regulations
- FCA — Payment Services and Electronic Money: Our Approach, March 2026
- FinCEN — Application of MSB Regulations to an Independent Sales Organization and Payment Processor
- European Parliament — Revision of EU Rules on Payment Services
- European Commission — Position on the PSD3 Legislative Proposal, 3 November 2026
This material is general information and is not legal advice. Information reviewed as of 14 November 2026. Rules and deadlines change: check the official requirements for your business model and target markets before implementation.
