A Bulgarian payment institution licence requires careful classification of the proposed payment services and a coherent BNB application covering capital, governance, safeguarding, AML/CTF and digital operational resilience.
Vassilev & Chisuse Law Firm · 2026-10-08 · Legal review: 12 October 2026
A business that intends to provide regulated payment services from Bulgaria generally needs to determine whether its model requires authorisation as a payment institution, registration as an account information service provider, another financial licence, or falls outside the regulated perimeter. The legal classification should be completed before the product, customer flows and contractual structure are finalised because the classification affects capital, governance, safeguarding, operational resilience and the application package before the Bulgarian National Bank.
As of 09 October 2026, the principal Bulgarian framework remains the Law on Payment Services and Payment Systems and BNB Ordinance No. 16. The current EU payment-services framework is still based on PSD2, while the proposed PSD3 and Payment Services Regulation have progressed through the EU legislative process but should not be treated as the applicable licensing regime until they enter into force and become applicable.
A licence is required where a Bulgarian company intends to provide payment services that fall within the regulated categories under Article 4 of the Law on Payment Services and Payment Systems and no exemption applies. The precise service classification is critical because activities such as maintaining payment accounts, executing payment transactions, issuing payment instruments, acquiring payment transactions, money remittance and payment initiation are regulated differently from ordinary software, invoicing or commercial collection services.
A provider that offers only account information services may fall under a registration regime rather than the full payment-institution authorisation regime. A company that combines account information with other regulated payment services may, however, need a payment institution licence covering the relevant services. The business model should therefore be assessed as a whole rather than by the label used in customer contracts.
The Bulgarian National Bank is the competent authority for granting payment institution licences in Bulgaria. The applicant submits a written application to the BNB together with the documents required by the Law on Payment Services and Payment Systems and BNB Ordinance No. 16.
The BNB also maintains the public register of licensed payment institutions, their branches and agents. A licence defines the payment services that the institution may provide, so adding a new regulated service may require an extension of the existing licence.
The minimum initial capital depends on the payment services to be provided. From 1 January 2026, the statutory amounts are denominated in euro. A payment institution providing only money remittance must hold initial capital of at least EUR 20,000. A payment institution providing only payment initiation services must hold at least EUR 50,000. Where the institution provides any of the payment services under Article 4, items 1 to 5, the minimum initial capital is EUR 125,000.
The initial capital requirement is only the starting point. After authorisation, payment institutions must also comply with ongoing own-funds requirements applicable to their licensed activities. The BNB may also assess whether the institution's financial resources are adequate in light of its risk profile and operating model.
An applicant for payment initiation services under Article 4, item 7 must also maintain professional indemnity insurance or another comparable guarantee covering the territories in which the service will be offered. A provider applying only for registration to provide account information services under Article 4, item 8 is subject to a corresponding professional indemnity insurance or comparable guarantee requirement.
The applicant must be incorporated, or be in the process of incorporation, as a Bulgarian limited liability company or joint-stock company. Its registered office and head office recorded in the Commercial Register must correspond to the place where its actual management is carried out, and at least part of the payment-services activity must be effectively performed in Bulgaria.
The BNB assesses the organisational structure, allocation of responsibilities, managers, qualifying shareholders, internal controls, risk management, use of agents and branches, outsourced functions and interaction with payment systems. The origin of the capital and funds used to acquire qualifying holdings must be transparent and lawful.
For founders, this means that a Bulgarian address and formally appointed managers are not sufficient on their own. The proposed organisation must be capable of operating the regulated activity in practice and of demonstrating effective governance and oversight from Bulgaria.
The application package must describe the proposed payment services and the manner in which they will be provided clearly, precisely and comprehensively. The documentation normally includes the corporate structure, programme of operations, financial projections, governance arrangements, internal control framework, risk-management procedures, security arrangements, business-continuity measures, outsourcing arrangements, information on managers and qualifying shareholders, and evidence of the source of capital.
The BNB's licensing page provides the current forms and declarations under Ordinance No. 16. The package should be internally consistent: the business model, customer flow, contractual framework, financial forecast, safeguarding method, operational processes and technology architecture should describe the same operating model.
Where a payment institution receives funds from payment service users for the execution of payment transactions, those funds must be protected in accordance with the statutory safeguarding regime. For payment services under Article 4, items 1 to 6, funds that have not been transferred to the payee or to another payment service provider by the end of the working day following the day of receipt must be deposited in a separate safeguarding account with a bank licensed in a Member State or with the central bank of a Member State.
Safeguarding is not only a banking arrangement. The legal agreements, accounting treatment, reconciliation process, operational controls and customer flow should all support the protection mechanism. A structure that is legally described as safeguarded but cannot be reconciled operationally may create a material licensing and supervisory issue.
Payment institutions are financial entities within the scope of the Digital Operational Resilience Act. Their governance of information and communication technology risk, incident management, resilience testing and third-party technology arrangements must therefore be designed with DORA in mind. For a detailed review of these requirements, see VC Law's DORA practical guide and DORA legal service.
A licensed payment institution is also subject to the applicable Bulgarian anti-money laundering and counter-terrorist financing framework. The customer due diligence, transaction-monitoring, sanctions-screening, internal reporting and governance model should be proportionate to the payment services, customer base, distribution channels and jurisdictions involved. VC Law also advises on AML/CTF compliance.
Under Article 11 of the Law on Payment Services and Payment Systems, the BNB examines the application and decides whether to grant or refuse the licence within three months from receipt of the application. If the application is incomplete, the BNB may require the missing documents and information to be provided within a period not exceeding two months. In that case, the BNB decides no later than three months after receiving the supplementary documents and information.
From 1 January 2026, the fee under BNB Ordinance No. 16 for examining an application for a payment institution licence is EUR 4,000. The statutory review period and the administrative fee do not by themselves determine the commercial launch date. Time should also be allowed for corporate structuring, governance appointments, technology and outsourcing documentation, safeguarding arrangements, financial modelling and preparation of regulatory policies.
A Bulgarian payment institution may use the EU cross-border notification framework to provide licensed services in other Member States through freedom to provide services or, where relevant, through a branch or agents. The process is coordinated through the BNB and the competent authorities of the host Member State.
This cross-border framework does not expand the scope of the Bulgarian licence. The institution may passport only the regulated services for which it is authorised and must also consider host-state conduct, consumer, anti-money laundering and other rules that remain applicable.
The EU institutions reached a provisional political agreement on the proposed PSD3 and Payment Services Regulation in November 2025. In April 2026, Council documents confirmed the final compromise texts with a view to agreement in the legislative procedure. As of 12 October 2026, businesses should continue to base a Bulgarian licensing application on the rules currently in force rather than future legislation that has not yet become applicable.
At the same time, founders building a new payment business should monitor the final EU texts because the new framework is intended to change parts of the licensing and supervisory regime and may require future adjustments to governance, customer protection and operational processes.
Vassilev & Chisuse Law Firm advises payment businesses on regulatory classification, corporate structuring, preparation of BNB licence applications, governance, safeguarding, outsourcing, technology arrangements, AML/CTF requirements and cross-border expansion. Our payment institution licensing service can cover the process from the initial regulatory analysis through filing and responses to regulatory questions.
Where the model also involves broader banking or financial regulation, see our Banking and Finance practice.
This article reflects the legal framework reviewed as of 09 October 2026 and is for general information only. It does not constitute individual legal advice. The licensing analysis depends on the exact payment flow, contractual structure, services, technology and customer model, and future EU legislative changes may alter the applicable framework.