EMI Licence: What an Electronic Money Institution Licence Costs

An electronic money institution licence is the FCA authorisation that permits a firm that is not a bank to issue electronic money, hold stored customer balances, and provide payment services alongside them. In practice that covers wallets, prepaid and debit cards, stored balances, and transfers in and out of those balances.

The permission set comes from Directive 2009/110/EC, which defines electronic money as monetary value stored electronically and issued on receipt of funds. The FCA supervises electronic money and payment institutions in the United Kingdom.

Issuing e-money is the dividing line. If you only move other people’s money and never issue a stored balance, a payment institution authorisation is the lighter route, and the eight payment services and their capital tiers are set out on our payment and e-money licences page. Which of the two fits your model is covered on EMI or payment institution licence, and the UK payment institution route has its own page at UK payment institution authorisation.

An authorised electronic money institution holds EUR 350,000 of initial capital. A small electronic money institution has no fixed capital figure at all, and that is the part the field gets wrong.

Below EUR 500,000 of average outstanding electronic money, a small EMI has no initial-capital requirement. At or above that figure it must hold 2% of its average outstanding electronic money, which is a sliding number rather than a fixed one. EMRs 2011 Sch 2 para 3(1) sets both limbs, and the ongoing analogue is at Sch 2 para 23(2) with EMD2 Art 5(3) Method D behind it. Every figure in this section is denominated in euros.

Two ceilings decide which tier you may register as. EMRs 2011 reg 13(3) caps a small EMI at EUR 5,000,000 of average outstanding electronic money, and reg 13(4) caps monthly payment transactions at EUR 3,000,000 on a 12-month average. Cross either and you apply as an authorised institution. EMD2 Art 9(1)(a) sets the same EUR 5,000,000 limit at directive level, and the FCA’s page for EMI applicants sets out the conditions for both tiers.

The EUR 350,000 floor is not a UK invention. EMD2 Art 4 requires initial capital of not less than EUR 350,000 across the European Economic Area, which is why the figure does not change when you compare jurisdictions.

The initial capital is EUR 350,000 in all three, because it is a floor set by EU law rather than a national choice. What genuinely differs is the fee, whether an EEA passport comes with the authorisation, and whether a reduced tier exists.

Figures above appear only where we verified them directly against the named regulator. Lithuania’s restricted-activity EMI route carries a lower state levy of EUR 1,235 and no minimum capital, per the Bank of Lithuania, and it is valid solely in Lithuania, so it does not give you the EEA reach that is usually the reason to apply there. The mechanics of the Lithuanian file, its annexes, its completeness review and its outstanding-e-money ceiling are covered on EMI licence in Lithuania.

The Ireland cells above are blank because we have not verified them against the Central Bank of Ireland directly. We would rather leave a gap than publish a figure we cannot source. For firms already authorised across the EEA, the EBA register of payment and e-money institutions is the cross-border reference.

The permission set is narrower than a lot of the marketing in this market suggests, and the limits are set by EMD2 Art 6 and the FCA’s own supervision of e-money and payment institutions.

• You cannot lend from your own balance sheet. Credit may only be granted as an ancillary part of a payment service, on the terms set by EMD2 Art 6.
• You cannot pay interest to customers out of the safeguarded pool. Holding e-money is not a deposit and cannot be rewarded as one, which follows from the same Article 6 permission set.
• Your customers have no FSCS deposit protection. What they have instead is safeguarding of 100% of their funds under PSRs 2017 reg 23, which is a different mechanism with a different failure profile.
• A UK authorisation carries no EEA passport, so firms serving both markets hold two authorisations. The FCA authorises for the United Kingdom only.

If your model requires lending from your own balance sheet, you are looking at a different authorisation altogether. That route is covered on our banking authorisation page.

This suits you if you intend to issue stored balances, wallets or cards under your own brand, you can hold EUR 350,000 of capital without touching it, you want a United Kingdom authorisation for United Kingdom customers and banking, and you can staff a UK head office with an MLRO and a named main contact.

It does not suit you if you only move funds and never issue a stored balance, in which case a payment institution authorisation is lighter and cheaper. Nor if you need EEA passporting from a single licence, which a UK authorisation no longer provides. Nor if you cannot fund the capital, or you need to lend from your own balance sheet, or you need the authorisation inside three months from today, since the statutory clock does not begin until the file is complete.

The FCA Financial Services Register is the authoritative record for UK firms. Search the firm name and the entry tells you whether it is an authorised or a small electronic money institution, when that status began, and whether it has been cancelled or varied.

What the register does not tell you is whether a firm’s product is any good. Presence on it is evidence of authorisation and nothing more, so do not read it as a safety rating. For firms authorised elsewhere in the European Economic Area, the EBA register of payment and e-money institutions covers the same ground across member states.