Below we discuss how to become an electronic money institution or an e-money firm. Across all EEA (European Economic Area) countries, the regulations are the same with regards to becoming an electronic money institution (EMI).
The Electronic Money Regulations (EMR) was published in 2009 and implemented into UK law in 2011. This sets out the definitions, standards, capital requirements, and rules in relation to issuing e-money, such as prepaid cards and e-wallets.
If you want to obtain an e-money license and offer e-money, such as prepaid cards or electronic wallets, used to pay for goods at a range of retailers, then you must apply and become either authorised or registered electronic money institution.
In the UK, you can apply and become either an authorised electronic money institution or a small electronic money institution. Below, we will discuss the differences between the two options.
1. Choose the license
Option 1 - Become an Authorised Electronic Money Institution
Under this option, when your business becomes authorised, it means that you can issue e-money and provide payment services in all EEA (European Economic Area) countries, even though your license is obtained a single EEA country e.g. the UK. For example, if you were to obtain an e-money license in the UK you can then provide your e-money and payment services to people in countries such as Germany, France, Italy and Ireland.
Initial Capital Requirement: the initial capital required under this option is EUR 350,000. You need to show this money in a bank account with the submission of your application. You are not required to 'freeze' this money with a bank or the regulator. In fact, you can use this money as you wish - the key is to show to the regulator that you have a balance equalling to this amount.
- Rent a physical office in the UK