E-money Electronic Money Institution License application

Electronic Money Institution license in the UK | EMI license in the UK | E-money license |EMI license UK


This article looks at obtaining an E-money license EMI license/ Electronic Money Institution license in the UK. If you wish to become an E-money license EMI / Electronic Money Institution in the UK then you must prepare and submit an Electronic Money Institution license / E-money license application in the UK to the Financial Conduct Authority. Buckingham Capital Consulting can help you if you become an Electronic Money Institution in the UK (also called the EMI license UK or E-money license in the UK). An E-money license (Electronic Money Institution / EMI License) license will enable you to offer all the services of a Payment Institution.


Below we will look at the process of becoming an E-money license (Electronic Money Institution / EMI) firm as well as looking at the key regulatory requirements of becoming an E-money license / Electronic Money Institution license / EMI license.


The regulatory framework for E-money license EMI license / Electronic Money Institution license in the UK


PSD2, or the Payment Service Directive 2, is an EU Directive (Directive 2015/2366) that sets requirements for businesses that provide payment services. It applies to banks, building societies, payment institutions, electronic money institutions and their customers.

PSD aims to promote innovation within the payments sector. Furthermore, it aims to improve protection for consumers and make payments both safer and more secure.


The following laws and regulations are applicable to E-money license EMI license / Electronic Money Institution license firms:


- The Financial Services and Markets Act 2000

- The Payment Service Directive (Directive 2015/2366)

- The Electronic Money Regulations 2011

- Directive 2009/110/EC of the European Parliament

- The Payment Service Regulations 2017

- Payments in Euro (Credit Transfers and Direct Debits) Regulations 2012

- Regulation (EC) No 924/2009

- The SEPA Regulation (Regulation (EU) 260/2012

- The Payment Accounts Regulations 2015

- EU Payment Accounts Directive

- Data Protection Act 2018

- Guide to the UK General Data Protection Regulation (UK GDPR)

- Proceeds of Crime Act 2002 (POCA)

- Terrorism Act 2000

- Money Laundering, Terrorist Financing and Transfer of Funds 2017

- Regulation on interchange fees for card-based payment transactions (EU) 2015/751

- The Money Laundering and Terrorist Financing Regulations 2019

The UK regulator for E-money EMI / Electronic Money Institution

The Financial Conduct Authority in the UK regulates firms that provide regulated services, including, consumer credit, payment services, e-money, lending, insurance and investment services.

If you wish to issue E-money / Electronic Money services in the UK, such as prepaid cards or electronic wallets, you will require an Electronic Money Institution license from the Financial Conduct Authority by submitting an electronic money institution license application.

The Financial Conduct Authority expects firms to meet a range of requirements before it allows them to provide regulated financial services as an electronic money institution. When an applicant firm submits an application seeking authorisation as an E-money license EMI license / Electronic Money Institution license, the Financial Conduct Authority will review their business plans, risks, budget, resources, systems, controls and people.


What is electronic money?

As per Article 2(2) of Directive 2009/110/EC, “e-money” means “electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transaction, and which is accepted by a natural or legal person other than the electronic money issuer”. Prepaid cards and electronic wallets are examples of electronic money.

How to prepare a strong E-money license EMI license / Electronic Money Institution license application in the UK

As part of your UK E-money license EMI license / Electronic Money Institution license application, you will be required to submit a number of documents, policies and procedures, including, a business plan, your safeguarding measures (how you will keep your client money separated and ring-fenced), your governance arrangements and risk management, your procedures for managing and handling security incidents and customer complaints, your security policy and your measures against financial crime, including AML. These policy and procedural documents must be specific to your firm and adequately address key aspects as set out by the regulator. Submitting templated documents will not be accepted and will cause delay, and potential rejection of your application. This is why it is important to prepare policies and procedures that are well thought-through and adequately address the regulator’s requirements and what it expects to see.

An important part of your E-money license EMI license / Electronic Money Institution license application in the UK is to ensure you meet the regulator’s basic conditions. Think of the basic condition as the basic requirements you must have in place. For example, your employees must be located in the United Kingdom. You will need to demonstrate through your application that you have appropriate resources to operate your business. This includes having sufficient financial, management, staff, and systems to manage your business. Your team should be suitable and competent in their roles.

Additionally, for your E-money license EMI license / Electronic Money Institution license application, you will need to provide details of your IT systems, including both core systems and any support systems. The regulator will expect to see that you have these in place before it issues you your E-money license EMI license / Electronic Money Institution license.


​Furthermore, you must have adequate resources in place. This includes financial resources, i.e. possessing sufficient funds to manage and operate the business. You will be required to demonstrate that you have suitable and experienced management and employees to manage the business. Firms must also demonstrate that they adequate IT systems and internal controls to ensure the safety of payments and manage fraud adequately and effectively.

You must provide policies and procedural documents that clearly demonstrate that you understand your business risks. Firms should prepare a risk framework and address how they will mitigate their risks, including operational, security and money laundering risks.

Documents required to apply and become an E-money license EMI license / Electronic Money Institution in the UK

As part of your E-money license EMI license / Electronic Money Institution license application, you will be required to provide the following information as part of your application:

  • company identification details

  • programme of operations

  • business plan and financial forecasts

  • a description of your business’s organisation structure

  • evidence of your initial capital

  • your measures to safeguard funds of your users

  • your compliance & governance arrangements and internal controls

  • your procedure for monitoring, handling, and following up on security incidents and security-related customer complaints

  • your processes for filing, monitoring, tracking and restricting access to sensitive payment data

  • your business continuity measures

  • the principles and definitions applicable to the collection of statistical data on performance, transaction and fraud

  • security policy

  • your internal control mechanisms to comply with obligations in relation to money laundering and terrorist financing (AML/CTF obligations)

  • details of your qualifying holdings (shareholders)

  • details of any outsourcing arrangements

Amount of time it takes to obtain the E-money license EMI license / Electronic Money Institution license in the UK

The Financial Conduct Authority must make a decision within three months of receiving a complete Electronic Money Institution application. In reality, it takes, on average, around 4-5 months for an application to be assessed and a decision to be made.



Initial capital requirement for the E-money license EMI license / Electronic Money Institution license


The initial capital required for an E-money license EMI license / Electronic Money Institution license is €350,000

How we can help

Buckingham Capital Consulting is a leading international consulting firm, specialising in payment services, electronic money, banking and investment services. We are able to advise you on the best course of action and strategy based upon your business plan and financial product or service. We can help you with licencing, compliance, operational setup and related services, including, obtaining banking facilities. For more information, visit our website at www.buckinghamcapitalconsulting.com.


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