Ensuring a successful PSP migration: Lemonway’s 5 key steps

7 January 2021

Business Insight

From service disruption to user impact or modification of the KYC rules, migrating to a new payment service provider (PSP) can be a daunting prospect. But there’s no need to fear if you adhere to our simple, tried-and-tested process. Having helped many of its partners with their PSP migration, Lemonway has devised a series of steps that will allow you to seamlessly switch between online payment systems.


1. Administrative approval

The steps outlined below can be carried out concurrently. The following tasks must be completed during the administrative approval phase:

  •       KYB approval
  •       The creation of an agent file with the ACPR
  •       Bank approval

In order to begin the migration process, you must first make your users aware of Lemonway’s Terms and Conditions of Use (TCU). Every platform user must accept the TCU for operations to get access to your platform and be able to perform online transactions.


2. Payment account management

Not all payment service providers work in the same way. Lemonway will provide a template with a list of mandatory fields to ensure you have the necessary information for the payment solution to run smoothly. You should use this document to extract the existing payment account database from your previous PSP. This data will then be used to create wallets in the Lemonway environment. Our teams can then get on with setting up the SDD mandates.


3. KYC management

Once step 1 is complete, you need to provide us with a list of users who have accepted Lemonway’s TCU as well as a list of users with a KYC approved by the old PSP. We will then collate the data to obtain a list of users for whom you need to upload the KYC documents already in your possession.

Once a user has:

  •       agreed to the Lemonway TCU,
  •       been granted KYC status from your previousPSP,
  •       provided KYC documents authorised by the previous PSP,

they will be granted provisional ‘KYC pending approval’ status, allowing them to continue to make transactions whilst their account is pending approval. Lemonway then has a certain period of time — agreed by both parties — to carry out the necessary checks and permanently approve the payment accounts. Lemonway may ask the platform operator to contact the account holders if any of the required documentation for ID verification is missing.

Good to know: Lemonway has a rigorous approval process and therefore requires more documentation than other PSP to approve a KYC. For example, we request not one but two forms of ID from each private individual for security purposes. In some cases, the documentation submitted to the previous PSP may also have expired and must be resubmitted. A longer processing time is to be expected for the reasons above and according to the number of payment accounts managed by the platform.

The integration of all documents is carried out via the Lemonway API.


4. Deployment

Lemonway will send you a list of all wallets with ‘KYC pending approval’ status. You must then make a global transfer of the total balance of all payment accounts to Lemonway’s dedicated migration payment account. The funds from each payment account will then be automatically redistributed via the API. Any payment accounts that do not have ‘KYC pending approval’ status will be dealt with in step 5.


 5. Settlement

The length of this step depends on your previous PSP as he must specify how long its back office is going to be available for. During this time, you will be able to make payments to new users who log in and accept the Lemonway TCU by transferring the money directly to their payment accounts. You can use our virtual IBAN solution to do this.

During the final stage, Lemonway will begin verifying and approving the KYC documents provided so that every payment account is eventually granted permanently approved KYC status.

And voilà! The migration will then be complete. All of your users will have been reviewed in accordance with the KYC and KYB protocols set out by the ACPR (the French Prudential Supervision and Resolution Authority).This ensures your compliance with the applicable regulations, including the French directive on the prevention of money laundering and financing of terrorism (LCB-FT) and the French payment services directive (DSP2).