On the benefits of communication, or What is an MSB licence?

7th of July

It has been said that the success or failure of a business is largely based on how much information its manager has and how he or she is able to put together the individual pieces of knowledge about the business world into a single, profitable picture for his or her company. We would like to share a story about how such puzzles are sometimes put together to the mutual satisfaction of business partners and lead to win-win situations.

Our company has a wide network of partners, including cooperating with payment systems from all over the world (you can find out more about all Intelligent Solution Group's services here. Some time ago we called our partners in order to maintain contact, to find out if they are satisfied with our cooperation and how we can expand our cooperation.

In one such conversation, we spoke to a partner who runs a neobank with an English EMI financial licence. We have opened accounts on his payment platform for our clients on more than one occasion and have helped with other financial issues related to international payments and money transfers.

The partner was quite happy with the cooperation with our company, and shared his plans - after Brexit he was looking for an opportunity to expand the range of services to his clients, he wanted to expand the geography of his activities and include cryptocurrency operations in his offer. Our partner realised that the more different licences his payment system had, the bigger market segment it could cover, and this, in turn, would make the company more competitive in the long term.

From then on, things started to develop in a win-win scenario - our partner was very happy to learn that Intelligent Solution Group was helping to acquire the Canadian Money Service Business (MSB) licence, which just allowed him to implement plans to expand his offering - both geographically and product-wise.

Given the long and arduous path our partner had gone through to obtain a UK EMI licence (the procedure often taking over a year), we immediately offered him the option of buying a ready-made company with a licence. By the time we talked to our partner, Intelligent Solution Group had just finished working on the second shelf company with MSB licence and we managed to save time and nerves of our partner - the time of re-registration of the company to the new owner was only 2 months, while the purchase of MSB licence takes about 5 months. Our offer to purchase a company with MSB license includes: re-registration of the ready-made company to the client, branding, obtaining unlinked swift and lei numbers, developing AML and KYC policies, business plan, and the partner was happy to receive such a complete list of services.

We also helped our partner to open a corporate account with a European bank and an account for client funds.

Conclusion - we need to communicate more often, because the result of a short conversation on the phone was a win-win solution for us and our partner: with the new MSB license, he has expanded his geographic capabilities and product line, and our clients with accounts on his platform now receive a service with more features.

For those who are interested in our story and want to understand more about the differences between MSB and PI/EMI licenses, here is a small comparison table of the features of both licenses.

Next week we plan to publish a more detailed breakdown of the characteristics of the MSB licence and its opening requirements.

Comparison of the Canadian MSB licence and the European Economic Area (EEA) PI/EMI licence

Parameter EMI/PI in EEA MSB in Canada
Regions allowed to serve customers All EEA countries with passporting conditions     Canada, with the possibility of a return request from customers from other regions
Time of receipt (approx.)     Up to 1 year Approx. 5 months
Core services           Payments, currency exchange, cash withdrawal, payment card issuance, acquiring, money transfers, payment initiation services, account information services, electronic money issuance (EMI only)     Money transfers, including cross-border, crypto and crowdfunding services, access to personalised e-wallets, merchant acquiring
Management requirements     At least two directors, a senior resident executive in the country where the license is obtained, an MLRO employee     At least one director and one compliance officer. No requirement for a director to reside in Canada
Initial capital requirements     Minimum of EUR 350,000 for EMI No requirements