How Regulation Differs Across Latin America, Europe, the U.S., and China

The global payments landscape continues to evolve rapidly. Regulators are tightening supervision, strengthening customer protection, and introducing open finance and instant payment frameworks.
For any company looking to expand internationally, understanding the nuances of payment licensing across major markets has become a strategic must.
This report provides a concise overview of the key licensing regimes across Europe, the United States, China, and Latin America — and what they mean for fintech expansion in 2025.

Europe: A Unified Market Under PSD3

Europe remains the most harmonized and scalable environment for payment institutions.
The Payment Institution (PI) and Electronic Money Institution (EMI) licenses allow companies to operate throughout the entire European Economic Area (EEA) via the passporting mechanism.
Minimum capital requirements range from €20,000 to €350,000, depending on the scope of services.
The upcoming PSD3 + Payment Services Regulation (PSR) package (effective in 2025) enhances anti-fraud protections, harmonizes operational standards, and strengthens consumer rights.
Europe is also leading the way in open finance and instant payments adoption.

United States: Fragmented, but the Largest Market

The U.S. remains the most complex — and potentially the most lucrative — payments market.
There is no single federal license: each state requires its own Money Transmitter License (MTL), while at the federal level, companies must register as Money Services Businesses (MSBs) with FinCEN under the BSA/AML framework.
To simplify oversight, state regulators have introduced the Model Money Transmission Modernization Act (MTMA)and One Company, One Exam, both coordinated by CSBS, to harmonize rules across multiple states.
Most companies start by partnering with a licensed sponsor bank or processor and gradually obtain their own licenses as they scale.

China: High Barriers, Tight Supervision

Following major reforms in 2024, China significantly tightened its regulation of non-bank payment institutions.
The Payment Business Permit, issued by the People’s Bank of China (PBOC), now requires a minimum registered capital of ¥100 million (regional) to ¥300 million (national).
New rules introduced in 2024–2025 impose strict data localization, cross-border payment controls, and periodic license renewals.
Foreign companies typically enter the market via joint ventures or strategic partnerships with licensed domestic entities.

Latin America: Diverse, Dynamic, and Fast-Evolving

• Latin America’s fintech sector is booming — but each country has its own framework.
• Brazil: The Payment Institution (IP) model regulated by the Central Bank (BCB) includes subtypes such as EME, EIP, Acquirer, and ITP. The Pix instant payments system is now a global benchmark.
• Mexico: Under the Fintech Law (2018), operators must be licensed as IFPE (e-money) or ITF (crowdfunding)entities by CNBV.
• Argentina: Providers are registered as PSP / PSPCP with the Central Bank (BCRA).
• Colombia & Peru: Use specialized models such as SEDPE / EDE for electronic deposits and payments.
• Chile: The new Fintech Law 21.521 (2025) introduces open finance and Payment Initiation Services (PIS).

Despite regulatory diversity, the region’s innovation pace — especially in digital payments and alternative finance — continues to accelerate.

⚙️ Key Global Trends for 2025

• Regulatory harmonization: PSD3 in Europe and MTMA in the U.S. bring clearer, more consistent compliance standards.
• Open finance & instant payments: Real-time rails (Pix, SEPA Instant) become mandatory for most providers.
• Cybersecurity & data protection: Rising expectations, especially in the EU and China.
• Localized innovation: Latin America remains a sandbox for new payment models and inclusive financial solutions.

💡 Summary

Europe offers the most predictable and scalable framework with EEA passporting.
The U.S. requires a multi-layered licensing strategy but gives access to the world’s largest market.
China is tightly regulated and data-centric — entry usually requires local partnership.
Latin America is fragmented but full of opportunity, with Brazil and Mexico leading regulatory modernization.