Small Payment Institution
We are leaders in legal services for small payment institutions. We have helped dozens of companies obtain a MIP licence and safely run a payments business.
fintech brands we have worked with
how can we help you?
Setting up a MIP
We have helped dozens of companies become a MIP. We are happy to help you, too. We will efficiently prepare everything required to file the application with KNF and handle the entire licensing process, so that your company can grow its payments business.
Learn moreBusiness advisory
Make the most of the MIP licence. We will support you in developing the right products and solutions, and in finding business partners. With us, you will maximise the revenue of your payment institution.
Learn moreDORA
Implementing the DORA Regulation in small companies is a challenge. We have, however, proven ways to effectively deliver digital resilience and legal compliance in your small payment institution. We know how to do it efficiently.
Learn moreAML
We have extensive experience in implementing anti-money laundering procedures in small payment institutions. We will design the right solutions for you and deliver the necessary training.
Learn moreOngoing legal support
Contracts? Terms and conditions? Responses to letters from KNF or GIIF? No one really enjoys those. On top of that, the regulations change every day. At Legal Geek we provide payment institutions with continuous legal support. Thanks to us you can focus on making money, not on the regulations.
Learn moreSale / Purchase of a MIP
Do you have a MIP and want to sell it? Or are you looking for a ready-made small payment institution? We will help you not only find the right buyer or seller, but can also carry out the appropriate due diligence.
Learn moreAudits / Compliance DD
Keeping up with rapidly changing regulations is a real challenge. We will therefore review whether your payment institution meets the current regulatory requirements and help you align with them. We will also carry out an annual review of the procedures.
Learn moreCompliance / AML Officer Support
We know how much in-house legal and compliance teams have on their plates. That's why we help them tackle their day-to-day challenges. Whether in AML, DORA or any other broadly understood compliance area — we'll provide the support you need!
Learn moreTraining
Among the many obligations are training duties. We can deliver dedicated on-site sessions for you and also give you access to an e-learning platform, which is a cheap and efficient way to ensure annual AML and DORA training.
Learn morewhy choose legal geek?
about MIP
Small Payment Institutions (MIP) have been operating in Poland since 2018. Since then, more than 250 of them have been registered. A MIP can operate on a similar basis to a National Payment Institution (KIP), but the requirements for a MIP are less rigorous, allowing more entities to obtain the necessary authorisation.
The MIP licence is effectively the minimum licence required to offer innovative payment services. Among other things, it allows you to issue payment cards, provide BLIK payments to others or run virtual wallets.
The cost of setting up and running a MIP is incomparably lower than for a National Payment Institution.
who is the MIP for?
Payment gateways
If you want to offer payment acceptance via payment instruments, e.g. BLIK or card.
Marketplace
If you connect two parties and want to handle the payment between them, e.g. for the sale of goods, services or donations (donations / tips).
Lending services
With the MIP licence you gain additional ways to grow revenue in your lending company (including BNPL).
examples of small payment institutions
Currency exchange platform
Maintains so-called virtual wallets for its users (the ability to hold funds for future transactions).
Automatic payments
An app for automatic bill payments (gas, electricity, internet, cable TV) — money remittance service, including from a payment card.
Lending company
Issuing its own credit cards — i.e. issuing payment instruments.
Charity fundraisers
A platform for running charity fundraisers and handling payments for them.
Crypto-asset exchange
A business that exchanges crypto-assets into "classic" currencies (FIAT) as part of payment services.
Recurring payments
A company handling recurring payments for memberships, e.g. for gyms and swimming pools.
Summary
An app or system for paying for parking spaces in large cities.
Deferred payments
BNPL (Buy Now, Pay Later) service, enabling deferred payment for purchases in online stores.
what limits apply to a MIP?
A small payment institution has enormous capabilities and, in practice, only three constraints
Limit on funds per user
The maximum amount of funds held at any given moment for a single user cannot exceed EUR 2,000 — note that this refers to funds held on the account, not the value of transfers (those can be higher!).
Volume limit
On a 12-month average monthly basis, the volume must not exceed EUR 1,500,000 — i.e. EUR 18 million per year. If you exceed this limit, you must apply for a National Payment Institution licence.
Territorial limit
You can only carry out the activity in Poland. You cannot have agents or branches abroad.
when do you need to become a small payment institution?
As a rule, any entity that takes possession of money in order to transfer it to another person has to become a MIP.
This means that if, for example, you offer a payment gateway, your company should be a MIP. If you run a marketplace where buyers' funds land in your account and you later pay them out to the seller, you generally have to be a MIP.
Not sure whether you need MIP status?
Get in touch with us and we'll help you decide whether your business needs Small Payment Institution status.
Dziękujemy za wiadomość
our payment institutions experts
Meet the specialists who for years have successfully helped clients secure small payment institution status and supported fintech businesses.
Tomasz Klecor
Managing Partner
FinTech navigator. Lawyer.
Paweł Geremek
Attorney-at-law
ISO 27001 Auditor
MIP in questions and answers
Below you will find answers to the most frequently asked questions about the Small Payment Institution.
Any entity with its registered office or place of residence in Poland that meets the conditions laid down by the Polish Payment Services Act can become a small payment institution.
No. A MIP does not require any specific legal form. A MIP can be a sole trader, a registered partnership, a limited partnership, a limited liability company or a joint-stock company.
Unlike National Payment Institutions, small payment institutions are not subject to any specific share capital requirements. A MIP only has to have the share capital required for its legal form (for a limited liability company that is PLN 5,000).
No. A MIP does not need to hold own funds, nor does it need to meet any other specific capital requirements.
Yes. Even a newly created special-purpose vehicle with the minimum required share capital can become a MIP. There are also no restrictions for companies set up under the S24 procedure.
The timing depends on many factors, but on average it takes about 3 months. The time it takes Legal Geek to prepare the documents is typically 2 to 4 weeks. The duration of the proceedings before KNF varies. Statutorily it is up to 3 months, but typically KNF registers MIPs in about 2 months. Our record is 11 days.
We listed the documents a MIP must hold in the DOCUMENTS section, at the very bottom of the page. Some of these documents are filed together with the application for registration, others are provided to KNF later.
It depends 🙂
A lot depends on how the institution itself is structured. For "small" small payment institutions (e.g. a few employees, a simple structure, a straightforward transaction flow), the resources required are usually modest and do not create an additional burden.
For larger entities (especially joint-stock companies), there is a bit more to handle. Even so, with proper process automation it can all be kept up to date efficiently.
For most of our Clients, the actual workload associated with MIP status does not exceed 1/8 of a full-time equivalent.
As a rule, yes. A MIP should have a dedicated bank account for safeguarding user funds. It should be maintained at a Polish bank (PL IBAN).
In some cases this account can be replaced with a guarantee or an insurance policy. The bank account is, however, the recommended option.
Out of all the MIP obligations, in our view the most important ones are:
- application of AML/CFT rules;
- safeguarding of user funds;
- compliance with the statutory limits;
- carrying out the activity solely within the territory of Poland;
- meeting reporting obligations.
how to become a MIP?
We provide our Clients with comprehensive support in preparing the documentation and procedures required for a small payment institution and in filing the application with KNF. We conduct the proceedings on the Client's behalf and offer so-called "post-implementation support", i.e. a full range of activities once the MIP licence has been obtained (including help with the first reports).
Our goal is for the activities related to obtaining a MIP licence not to burden our Clients, and we structure the process so that more than 90% of the work sits on the Legal Geek team's side. In addition, we provide broad supplementary support for payment institutions, lending institutions and the entire FinTech sector, including a later transition from a MIP to a National Payment Institution.
Complete documentation
We prepare the full documentation required to file the application for entry in the MIP register, along with the procedures needed to run the business.
Representation before KNF
We run the proceedings before the Polish Financial Supervision Authority (KNF), respond to questions and ensure smooth communication.
Training
We deliver MIP and AML training and workshops for your team to prepare them for the new obligations.
Post-implementation support
We help with the first reports to KNF, NBP and the Financial Ombudsman, and assist with the response to the sector letter.
What working with us looks like:
We approach every MIP project holistically. We care about not only making your company a small payment institution, but also keeping it fully compliant with the law. That is why we serve Clients who want to become a MIP from the first call to the first reports — our cooperation does not end when the licence is granted. We help you long after you become a small payment institution — including with the first reporting obligations. With us, you will become a MIP in 13 steps!
Initial call
A no-obligation phone call during which we will work out whether you actually need a MIP and what your needs around this licence are. Based on this we will define the scope of our work. The call is entirely free and usually lasts about 15 to 45 minutes.
Proposal
We will present you with a proposal listing the individual elements of our work needed for you to obtain the small payment institution licence. We will also propose additional services that are not strictly required in the licensing proceedings but affect the correct functioning of the MIP (e.g. GDPR documentation).
Signing the agreement
Once you accept our terms, we sign the agreement. Don't worry — our agreement is short and simple! 🙂 We will also ask you to pay the first of the two instalments of our fee — this is required to start the work.
List of questions
The business is on your side, the documents are on ours. That's why at the start we will send you a list of the key information we will need. We will also ask you to prepare a financial plan (according to our guidelines) and to open a bank account for MIP purposes.
Kick-off meeting
During the call we will go through the questions we sent you and collect the information we need. The meeting can be held remotely (e.g. Google Meet, MS Teams) or in person at our Sopot office. We will refine the scope of the application and pin down exactly how your company provides payment services.
Documentation work
Over the following 2 to 4 weeks we will be drafting the documents required for the application. The timing depends, among other things, on how quickly we receive answers to the questions we sent earlier. Of course, our Team is at your disposal throughout this time.
Training
While we work on the documents, you will get access to our e-learning platform with training on small payment institutions and anti-money laundering (AML). Once you complete the training you will receive the relevant certificate.
Filing the application with KNF
Once the documents are ready and we have reviewed them together and agreed everything is in order, we will ask you for the second instalment of our fee. We will then file the application with KNF on your behalf for entry in the register of small payment institutions.
Proceedings before KNF
The proceedings before KNF typically last about 2 to 3 months. Sometimes KNF surprises us and wraps them up in... a week (we have such a record). During this time we conduct any correspondence with the supervisor on your behalf and respond to questions as they come up.
ENTRY IN THE MIP REGISTER!
Success! Your company is now a MIP! From now on you can start providing payment services!
KNF sector letter
Entry in the register is only the beginning of your journey as a small payment institution. We are right there with you, supporting you. We will prepare the response to the so-called "sector letter" that newly registered MIPs typically receive shortly after registration.
MIP / AML workshops
Once your company is ready to start operations as a small payment institution, we will run a roughly two-hour online workshop for your team — to prepare you even better for the new role.
Reporting support
New obligations can be stressful. That is why during the first year of your activity as a MIP we will help you file the first instance of every type of report — to KNF, NBP and the Financial Ombudsman alike.
MIP documents and procedures
A guide to the Small Payment Institution
Download the complete guide that will help you understand every aspect of setting up and running a Small Payment Institution. The document contains practical tips, legal requirements and expert advice.
Documents required for every MIP:
The documents and procedures below are always prepared, for every Small Payment Institution.
One of the core MIP documents. Prepared for a 12-month period. The regulations do not spell out detailed content requirements, but in practice KNF refers to the rules applicable to National Payment Institutions.
We prepare this document jointly with you, based on the questions we send you at the outset.
The financial plan primarily covers a balance sheet and profit and loss account projected over 12 months. A ratio analysis must also be prepared.
We help our clients do it as well as possible.
Another key document for the MIP, which we draft based on the information collected from you. The procedure sets out, among other things, methods for identifying, measuring and controlling the different types of risk in MIP operations.
The anti-money laundering and counter-terrorism financing procedure is one of the most important documents in a MIP. It sets out the rules for customer identification and verification, transaction monitoring and reporting of suspicious activity.
Additional documents that may be required:
The documents below are not required to obtain the registration, but in many cases they will be ESSENTIAL to start operations. For example, a Small Payment Institution must meet the requirements regarding the information contained in user contracts. We can prepare these documents for you on a separate engagement.
Documentation relating to the use of ICT services — essentially required in every small payment institution in order to start operations. Implementation of the DORA Regulation.
A set of procedures for outsourcing operational activities to external entities, taking supervisory requirements into account. We also prepare these procedures as part of DORA documentation
A full set of personal data protection documents, including the data protection policy, the record of processing activities and procedures for handling data subject rights.
AML
Effective anti-money laundering measures
Small payment institutions are required to implement rigorous anti-money laundering and counter-terrorism financing (AML/CFT) procedures. Failing to comply with these requirements can lead to severe financial penalties and reputational damage.
We offer comprehensive support in the AML area:
Risk-based AML procedures
Drafting AML procedures tailored to your institution's risk profile that will effectively protect your firm from money-laundering risk.
Effective KYC systems
Deploying effective customer identification and verification systems (KYC) that comply with legal requirements while not hindering user experience.
Transaction monitoring
Designing effective transaction monitoring procedures to detect suspicious activity and respond appropriately, in line with legal requirements.
Risk assessment
Designing customer and transaction risk assessment systems that enable effective AML risk management in the payment institution.
Reporting to GIIF
Drafting reporting procedures to the General Inspector of Financial Information so your firm can meet its statutory disclosure duties.
Training
Anti-money laundering training for employees, tailored to the specifics of working in a small payment institution.
Source update
Regular procedure updates in response to regulatory changes and new trends in anti-money laundering.
Inspection support
Support during inspections by supervisory authorities - help with preparing documentation and representing your institution's interests.
Day-to-day support for your in-house teams
We understand the challenges faced by in-house legal and compliance teams in payment institutions. The volume of duties, constant regulatory change and time pressure make additional expert support invaluable.
We offer:
Ongoing consultations
Ongoing consultations for compliance and AML officers, available on a retainer or ad hoc basis depending on need.
Difficult AML cases
Help resolving complex anti-money laundering cases and analysing suspicious transactions.
Reports to supervisory authorities
Support in preparing and reviewing reports to supervisory authorities, including GIIF, KNF and NBP.
Implementing new requirements
Advisory on implementing new regulatory requirements, including the DORA Regulation and updates to the AML Act.
KYC/AML review
Review of decisions taken in AML/KYC processes, particularly where a customer is classified as high-risk.
Risk assessment methodology
Support in creating and updating risk assessment methodologies, both for customers and for the institution as a whole.
Process optimisation
Help in designing and optimising internal compliance processes, boosting efficiency while maintaining legal compliance.
Technology tools
Advisory on the use of technology tools that support compliance, including transaction monitoring systems and KYC automation.
Our support for compliance and AML officers frees up your in-house resources while giving you access to specialist knowledge and experience. Your team can focus on strategic priorities, confident that day-to-day compliance challenges are handled professionally.
Business advisory
Make the most of the MIP licence
Holding Small Payment Institution status is just the start of the journey. The key to success is making proper use of the opportunities this licence offers.
Business advisory
Payment services design
We help design and roll out innovative payment services that will set your firm apart in the market. We analyse your customers' needs and propose solutions that meet them while maximising your profitability.
Building hybrid services
We combine payment services with other financial products to create comprehensive solutions that boost customer value and generate additional revenue streams for your firm.
Establishing strategic cooperation
We help identify and establish cooperation with the right business partners - banks, payment institutions, technology providers - who will help extend the reach of your services and strengthen their competitive position.
Payment process optimisation
We analyse and optimise your payment processes to make them more efficient, secure and user-friendly. We deploy market-leading practices tailored to the specifics of your business.
Growth planning
We support long-term growth strategy planning, including preparation to obtain a national payment institution (KIP) licence that will enable operations on a larger scale, without transaction limits.
With our support, your Small Payment Institution will be able to realise its full potential and compete effectively in the dynamic payment services market.
DORA
Effective digital resilience implementation
The DORA Regulation (Digital Operational Resilience Act) introduces new, demanding digital security standards for financial institutions, including small payment institutions. For smaller entities this is a particular challenge given their limited resources.
Our approach to implementing DORA in small payment institutions:
- We carry out a comprehensive assessment of your organisation's current digital resilience
- We identify gaps and areas that need to be aligned with DORA requirements
- We develop a practical implementation strategy tailored to the scale of your business
- We design and implement cost-effective solutions that boost digital resilience
- We prepare the required documentation and procedures
- We train your team on the new requirements and procedures
- We provide support with operational resilience testing
Thanks to our pragmatic approach you will meet DORA requirements without unnecessary organisational and financial burden. We will make sure your firm is digitally secure and legally compliant while remaining operationally flexible.
ongoing legal support
Focus on the business — we'll take care of the law
The rapidly changing regulations covering the financial sector are a challenge for every payment institution. Tracking regulatory changes and adjusting your operations to them requires specialist knowledge and a significant time commitment.
Our ongoing legal support for small payment institutions covers:
Monitoring legal changes
Monitoring of changes in Polish and EU law affecting payment institutions, with a monthly briefing on the most important changes.
Terms and Conditions
Drafting and updating contracts with customers, vendors and business partners, and developing and updating the terms and conditions of payment services.
Notices and disclosures
Preparing the disclosures and notices required by law, including information for users of payment services.
Representation before the supervisory authorities
Representation before the supervisory authorities, including preparing responses to letters from KNF and GIIF and support during inspections.
GDPR and personal data protection
Advice on personal data protection and GDPR compliance, including review and updating of documentation and support in the event of incidents.
Subscription packages
Legal consultations available on a subscription basis, tailored to your needs, ensuring cost predictability and constant access to support.
With our support, you can focus on growing the business, confident that every legal aspect of your operations is professionally managed. We deliver not only regulatory compliance, but also practical solutions that support your business goals.
sale / purchase of a MIP
Professional support in transactions involving the purchase and sale of small payment institutions
For MIP sellers:
When planning to sell your Small Payment Institution, you want to get the best possible price for your business. Our support covers:
- A professional valuation of your MIP
- Identification of the strengths and unique features that increase your institution's value
- Preparing the MIP for sale by optimising processes and documentation
- Help in finding the right buyers
- Running the entire sales process discreetly
- Negotiating the transaction terms on your behalf
- Safely completing the transfer of ownership and notifying the supervisory authorities
We help prepare your MIP so that you achieve the maximum sale price while minimising legal risk and ensuring a smooth transaction.
For MIP buyers:
Acquiring an existing Small Payment Institution can be a faster route into the payment services market than obtaining your own licence. We offer:
- Sourcing MIPs that match your business needs
- Comprehensive due diligence covering legal, financial and operational aspects
- Assessment of the risk associated with acquiring a specific institution
- Identification of potential regulatory issues
- Support in negotiating the purchase terms
- Help in preparing and reviewing the transaction documents
- Support in adapting the acquired MIP to your business plans after the purchase
- Handling the notification of changes to KNF
Thanks to our experience, you can safely acquire a MIP and quickly adapt it to your business needs, minimising risk and maximising growth potential.
audits / compliance DD
Comprehensive regulatory compliance review
Keeping up with rapidly changing regulations is a significant challenge for every payment institution. Regular audits and compliance reviews are essential to avoid potential sanctions and ensure operational security.
Our audit and compliance due diligence services include:
Compliance review
A comprehensive review of your institution's compliance with the current regulatory requirements in the financial sector.
Gap identification
Identification of potential gaps and areas for improvement in AML, DORA, GDPR and other legal requirements.
Effectiveness assessment
Assessment of the effectiveness of existing internal procedures and how they are actually applied in business practice.
Implementation verification
Verification of the correct implementation of obligations arising from acts and regulations applicable to payment institutions.
Report with recommendations
A detailed report with remediation recommendations and a practical change implementation plan.
Implementation support
Support in implementing the recommended changes and improvements to processes, procedures and documentation.
Episode page
The annual procedure review required by law, including an assessment of the effectiveness of AML procedures and money-laundering risk.
Inspection readiness
Preparation for inspections by supervisory authorities, including mock inspections and verification audits.
Our audits give you confidence that your payment institution operates in line with current legal requirements. Our recommendations will help you not only meet applicable rules but also optimise internal processes, boosting efficiency while preserving regulatory compliance.
Training
Efficient fulfilment of training obligations
Regular employee training in AML, DORA and other compliance areas is not just a legal requirement — it is also a key element in building an organisational culture focused on compliance and security.
Our comprehensive training solutions:
Training
- Dedicated workshops tailored to your company's specifics and run by expert practitioners
- The ability to tailor the programme to different employee groups and knowledge levels
- Coverage of the specific challenges and processes of your organisation
- Training materials for later use
E-learning platform
- Comprehensive online courses available 24/7
- A modular structure allowing flexible training planning
- Automatic progress tracking and certificate generation
- Regular content updates in line with changing regulations
- Interactive tests verifying understanding of the material
- The ability to monitor employees' completion of training obligations
- Significant time and cost savings compared to traditional training
Our e-learning platform is a particularly efficient solution for ensuring compliance with annual training requirements for all employees. It makes it easy to document fulfilment of training obligations while giving your team access to up-to-date, practical knowledge in a convenient format.