Securing an Electronic Money Institution (EMI) license is a crucial step for businesses aiming to offer electronic payment services within the European Union (EU). This license not only enhances credibility but also enables companies to issue electronic money, process digital payments, and expand financial services across EU member states. However, the process involves navigating complex regulatory landscapes, meeting stringent requirements, and ensuring compliance with financial and AML regulations.
This guide outlines the step-by-step process to obtain an EMI license and how Obtained.com can assist businesses in successfully applying and launching their licensed financial services.
An Electronic Money Institution (EMI) license permits institutions to:
- Issue electronic money (such as prepaid cards, e-wallets, or stored-value accounts).
- Provide payment services (including domestic and international fund transfers).
- Offer business and personal accounts (without providing traditional lending services).
- Operate across the European Economic Area (EEA) via passporting rights, allowing licensed EMIs to provide services in multiple EU countries without requiring additional licenses.
EMIs fall under the E-Money Directive (2009/110/EC) and the Payment Services Directive (PSD2), both of which govern financial services and require strong AML/KYC compliance, consumer protection measures, and secure transaction frameworks.
Before starting the application process, businesses must align with EU regulatory frameworks:
- E-Money Directive (2009/110/EC): Defines EMI licensing requirements.
- Payment Services Directive (PSD2): Covers payment security, customer protection, and Strong Customer Authentication (SCA).
- AML Directives (AMLD5 & AMLD6): Ensure compliance with anti-money laundering and customer due diligence.
Each EU member state has different EMI license processing times and regulatory environments. Some jurisdictions (e.g., Lithuania, Estonia, Ireland) offer faster approvals, while others (e.g., France, Germany, Italy) have stricter compliance reviews.
- The minimum initial capital for an EMI license in the EU is €350,000.
- The applicant must demonstrate ongoing financial viability and safeguard client funds.
A comprehensive business plan is required, detailing:
- Company structure & financial projections (including revenue and cost models).
- Market analysis & customer segmentation (target audience, competition, risk assessment).
- Operational framework (staffing, transaction monitoring, risk controls).
- Safeguarding of client funds (secured in specialized accounts).
To meet EU financial regulations, the applicant must implement:
- AML (Anti-Money Laundering) procedures that meet AMLD6 compliance.
- Transaction monitoring systems to detect suspicious activities.
- KYC (Know Your Customer) frameworks for verifying users and preventing fraud.
- Craft a detailed business plan aligned with regulatory expectations.
- Include numeric forecasts, market assessments, and risk mitigation strategies.
- Ensure the operational and compliance models are structured for long-term success.
- Develop AML policies, KYC procedures, and compliance frameworks in line with PSD2 and AMLD6.
- Prepare risk management strategies and customer protection measures to meet regulatory scrutiny.
- Ensure compliance with Strong Customer Authentication (SCA) and transaction security requirements.
- Identify and integrate AML service providers for automated fraud monitoring, real-time transaction tracking, and identity verification.
- Connect businesses with core banking technology providers that offer account management, card issuance, and secure payment processing.
- Assist in setting up safeguarding accounts with tier-1 financial institutions to secure client funds.
- Guide businesses in integrating open banking APIs to enhance payment services and connectivity.
- Assist in leveraging new Visa & Mastercard B2B transfer tools to streamline international business payments.
- Ensure full SWIFT connectivity, enabling global cross-border transactions with SWIFT tracking capabilities.
- Prepare and submit the EMI application, ensuring all documents and policies are regulator-ready.
- Liaise with national financial authorities to address compliance questions and expedite approval.
- Provide ongoing post-licensing compliance monitoring to ensure businesses remain fully compliant.
With the growing demand for digital payments and e-money services, obtaining an EMI license is a strategic move for FinTech companies, payment service providers, and digital banks. However, the application process requires regulatory expertise, strong AML compliance, and a robust financial framework.
🚀 Looking to secure an EMI license quickly and efficiently?
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