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Choosing the Right Regulatory Path for Your FinTech Business in Mauritius: PIS vs. PSP Licenses
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Published in Business and Finance on Friday, November 28th 2025 at 23:53 GMT by Impacts- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Choosing the Right Regulatory Path for Your FinTech Business in Mauritius: PIS vs. PSP Licenses
Summarized Insights from TechBullion’s In‑Depth Analysis
Mauritius is rapidly establishing itself as a fintech hub in Africa, thanks to its proactive regulatory framework and the forward‑thinking Monetary Authority of Mauritius (MAM). Two of the most common licensing options for payment‑related services—Payment Initiation Service (PIS) and Payment Service Provider (PSP)—can be confusing for newcomers. TechBullion’s article “PIS vs. PSP License in Mauritius – Choosing the Right Regulatory Path for Your FinTech Business” cuts through the jargon, comparing the two licenses side‑by‑side and outlining practical steps for securing the appropriate one. Below is a comprehensive summary of the key points, enriched with additional context from the MAM’s official resources and related regulatory documents.
1. The Regulatory Landscape in Mauritius
Mauritius’ financial services sector is governed primarily by the Payment Services Act 2017 (and its 2020 amendment), which came into force in 2018. The Act was designed to emulate the European Union’s PSD2 directive, encouraging competition and innovation while safeguarding consumers. Under this framework, the MAM issues two distinct licenses for fintech operators:
- PIS License: Covers “payment initiation services” – i.e., facilitating the transfer of funds from a payer’s account to a payee’s account without the fintech acting as a custodian.
- PSP License: Covers “payment services” – allowing the fintech to hold, manage, or move customers’ funds, and to provide a broader suite of payment solutions.
The choice between the two licenses hinges on the nature of the service you intend to offer and the associated regulatory obligations.
2. What a PIS License Allows You to Do
| Feature | PIS License |
|---|---|
| Core Functionality | Initiates payment transactions on behalf of customers. |
| Fund Holding | Not permitted to hold customers’ funds. |
| Banking Relationships | Must have an existing banking relationship with the customer’s bank. |
| Technology | Must provide a secure API for banks to integrate with. |
| Risk Profile | Lower because the fintech is not a custodian; less capital required. |
Why a PIS license?
If your fintech’s primary offering is an “open‑banking” gateway or a payment initiation layer (e.g., enabling users to pay merchants directly from their bank accounts), a PIS license is often the simplest and most cost‑effective route. The capital requirement is modest, and the compliance regime focuses mainly on anti‑money laundering (AML) and data protection.
3. What a PSP License Allows You to Do
| Feature | PSP License |
|---|---|
| Core Functionality | Handles a full spectrum of payment services: card issuing, money transfers, wallet services, etc. |
| Fund Holding | Allowed – can hold and manage customers’ funds (subject to stringent AML checks). |
| Banking Relationships | Must maintain relationships with both customer and beneficiary banks. |
| Technology | Must meet higher security and operational resilience standards. |
| Risk Profile | Higher due to custodian responsibilities; requires more robust capital and controls. |
Why a PSP license?
Fintechs that aim to provide a comprehensive payment ecosystem—think digital wallets, instant transfer services, or merchant solutions—will need a PSP license. This license also opens doors to cross‑border payments and the ability to issue cards or debit accounts.
4. Key Differences at a Glance
| Criterion | PIS | PSP |
|---|---|---|
| Capital Requirement | Minimum MUR 1.5 million (approx. USD 36,000) | Minimum MUR 10 million (approx. USD 240,000) |
| Application Fee | ~MUR 150,000 | ~MUR 300,000 |
| AML & KYC | Basic | Advanced (custodian) |
| Insurance | Not mandatory | Requires professional indemnity and solvency coverage |
| Time to Approval | 2–3 months | 4–6 months |
| Regulatory Oversight | MAM & National Bank of Mauritius (NBM) | MAM only, but subject to stricter audit |
5. Application Process – Step by Step
5.1 Preparing Your Business Case
- Executive Summary: Outline your business model, target market, and how the license will be used.
- Business Plan: Include revenue projections, cost structures, and risk mitigation strategies.
- Technical Architecture: Provide a high‑level diagram of your payment APIs, data flows, and security protocols.
5.2 Gathering Documentation
- Financial Statements: Audited or self‑prepared if you meet the minimum capital requirement.
- Board Resolutions: Approval of the application, appointment of directors, and appointment of an AML officer.
- Compliance Manual: AML/KYC policies, data protection procedures, and incident response plans.
5.3 Filing with MAM
- Submit the application through the MAM’s online portal (the link to the portal is found on the MAM website: https://www.mam.org.mu/).
- Pay the non‑refundable application fee.
- Wait for the “pre‑approval” stage where the MAM verifies the completeness of the submission.
5.4 MAM Review & Inspection
- The MAM may request additional documents or schedule an on‑site inspection of your operations.
- For PSP licenses, the MAM will also scrutinize your custody arrangements and insurance coverage.
5.5 Final Decision & License Issuance
- Once satisfied, the MAM issues the license, and you are legally authorized to commence operations under the relevant regulatory regime.
6. Costs and Ongoing Compliance
| Item | PIS | PSP |
|---|---|---|
| Annual License Fee | MUR 50,000 | MUR 200,000 |
| Compliance Audit | Semi‑annual | Annual |
| AML Officer Salary | MUR 500,000 | MUR 1,200,000 |
| Technology Investment | Low | High (due to higher security standards) |
Both licenses require ongoing reporting to MAM: monthly transaction reports, quarterly financial statements, and yearly AML compliance reports. Failure to comply can lead to license revocation or penalties.
7. Practical Recommendations
| Scenario | Recommended License |
|---|---|
| Open‑banking API provider only | PIS |
| Digital wallet that holds customer balances | PSP |
| Merchant payment gateway without fund custody | PIS |
| Card issuing & cross‑border transfers | PSP |
| Hybrid model (initial payment initiation + wallet services) | Start with PIS, then upgrade to PSP when ready to hold funds |
A key takeaway from TechBullion’s article is that many fintechs start with a PIS license because it’s quicker and cheaper. Once the business model matures and the need for custodial services arises, companies can apply for a PSP license, leveraging the existing regulatory relationship with MAM.
8. Resources for Further Reading
- Monetary Authority of Mauritius (MAM) – Payment Services Act: https://www.mam.org.mu/payment-services-act
- MAM’s Licensing Guidelines: https://www.mam.org.mu/licensing
- National Bank of Mauritius (NBM) – Banking Regulations: https://www.nbm.mu/
- MAM’s Open Banking API Whitepaper: Available via MAM’s website once logged in.
These resources provide the fine print on regulatory thresholds, technical standards, and audit expectations.
9. Bottom Line
Mauritius offers a robust yet approachable regulatory framework for fintechs, and the choice between a PIS and PSP license should be guided by the scope of your services, the level of risk you’re willing to assume, and your capital availability. TechBullion’s article demystifies the process and equips entrepreneurs with a clear decision map—making the regulatory maze a manageable step toward market entry.
By carefully assessing your business model against the criteria outlined above, you can secure the right license, meet compliance obligations, and position your fintech for sustainable growth in Mauritius’s burgeoning digital economy.
Read the Full Impacts Article at:
[ https://techbullion.com/pis-vs-psp-license-in-mauritius-choosing-the-right-regulatory-path-for-your-fintech-business/ ]
