Knowledge Centre

 - Electronic Money Institution

          Definition of an EMI license

EMI is short for an electronic money institution. An electronic money institution is a regulated entity and can issue electronic money such as prepaid cards and electronic wallets. Subject to obtaining the permission to do so, an electronic money institution may also provide payment services such as payment accounts, money transfer and merchant services.

 

          How to become an electronic money institution

In order to become an authorised electronic money institution, you must prepare and apply for authorisation as an electronic money institution to the financial regulator. You must include information including your business plan, programme of operations, compliance and governance arrangements, business continuity arrangements, security policy and a money laundering policy. You will also be required to meet regulatory conditions, such as possessing adequate and minimum capital, operational presence and safeguarding client funds.

 

 

          Services an electronic money institution can provide

Under an electronic money institution license, you may provide the following service:

:

  1. Issuance of electronic money, for example, prepaid cards and electronic wallets. You may also wish to apply and provide payment services under the electronic money institution license. These are:

  2. Payment accounts,

  3. Executing payment transactions e.g. placing, transferring or withdrawing funds initiated by the user.

  4. Money remittance

  5. Providing payment instruments and acquiring payment transactions

  6. Providing payment and account initiation services e.g. account to account payments.

 

          Capital requirements for an electronic money institution

The initial capital required for an authorised electronic money institution is €350,000.

 

          Time frame to obtain the electronic money institution license

The financial regulator is required to assess an application for registration as a small electronic money institution within 3 months, where an application is deemed as being complete. Where a regulator asks further questions concerning an application, this three-month period will be extended. Accordingly, it can take 4-5 months for your application to be assessed.

 

          Preparing a strong authorised electronic money institution license application

In order to prepare a strong authorised electronic money institution registration license application, you should ensure that you have:

  1. Completed the application form in its entirety. An incomplete application will delay your application with the regulator.

  2. Completed and attach individual forms and have provided any personal documents, such as ID and CVs.

  3. Provided details of your safeguarding arrangements. You are required to safeguard your client funds. You may do this by segregating clients into a separate client account or having an insurance policy place protecting your client funds for example, in the event of an insolvency.

  4. Provided evidence such as a bank statement to meet the initial capital requirements.

  5. Provided in-depth information for all the application form sections including, the business plan, programme of operations, security policy, compliance and governance, and money laundering policy.

 

  

          Definition of a Small Electronic Money Institution or SEMI license

SEMI is short for a small electronic money institution. A small electronic money institution is a regulated entity and can issue electronic money such as prepaid cards and electronic wallets. Subject to obtaining the permission to do so, an electronic money institution may also provide payment services such as payment accounts, money transfer and merchant services.

 

          How to become a small electronic money institution

In order to become a small electronic money institution, you must prepare and apply for registration as an electronic money institution to the financial regulator. You must include information including your business plan, programme of operations, compliance and governance arrangements, business continuity arrangements, security policy and a money laundering policy. You will also be required to meet regulatory conditions, such as possessing adequate and minimum capital, operational presence and safeguarding client funds.

 

          Services a small electronic money institution can provide

Under a small electronic money institution license you may provide the following service:

  1. Issuance of electronic money, for example, prepaid cards and electronic wallets. You may also wish to apply and provide payment services under the electronic money institution license. These are:

  2. Payment accounts,

  3. Executing payment transactions e.g. placing, transferring or withdrawing funds initiated by the user.

  4. Money remittance

  5. Providing payment instruments and acquiring payment transactions

  6. Providing payment and account initiation services e.g. account to account payments.

 

          Time frame to obtain the small electronic money institution license

The financial regulator is required to assess an application for authorisation as an electronic money institution within 3 months, where an application is deemed as being complete. Where a regulator asks further questions concerning an application, this three-month period will be extended. Accordingly, it can take 4-6 months for your application to be assessed.

 

          Preparing a strong small electronic money institution license application

In order to prepare a strong small electronic money institution registration license application, you should ensure that you have:

  1. Completed the application form in its entirety. An incomplete application will delay your application with the regulator.

  2. Completed and attach individual forms and have provided any personal documents, such as ID and CV.

  3. Provide details of your safeguarding arrangements. You are required to safeguard your client funds. You may do this by segregating clients into a separate client account or having an insurance policy place protecting your client funds for example, in the event of an insolvency.

  4. Provide evidence such as a bank statement to meet the initial capital requirements.

  5. Ensure that you provided in-depth information for all the application form sections including, the business plan, programme of operations, security policy, compliance and governance, and money laundering policy.

 

          Capital requirement for a small electronic money institution

No capital requirement is applicable on e-money up to €500,000. From €500,000 - €5m, the capital requirement is calculated at 2% of the issued electronic money.

 

          Restrictions with a small electronic money institution

The following is a list of the restrictions that apply to small electronic money institution:

  1. The monthly outstanding electronic money cannot exceed €5m

  2. If you going to provide payment services, you must ensure that the monthly payment transactions do not exceed €3m

  3. You cannot passport into Europe

Our Blog & Insights

Get in touch

 Contact Us
Email: info@buckinghamcapitalconsulting.co.uk
 
Telephone: 0207 866 2512 
International: 442078662512
Skype: BCC54321 
  • Facebook
  • Twitter
  • YouTube
  • Pinterest
  • Instagram

Buckingham Capital Consulting Ltd  |   One Kingdom Street, London, W2 6BD  |  Telephone: 0800 689 0501  |   Email: Info@buckinghamcapitalconsulting.co.uk

Registered in England and Wales registration number: 08744241

 

Copyright 2013 - 2020 Buckingham Capital Consulting Ltd