Small electronic money institution registration.

Who small EMI registration suits

A UK business that issues electronic money needs FCA authorisation or registration under the Electronic Money Regulations 2011. E-money is stored value: a customer pays in funds, receives a balance and spends it later, as with a prepaid card or a wallet in an app. Registration as a small EMI is the route for a company whose balances stay modest and which serves the UK only.

It usually suits:

• prepaid card and gift card programmes with a defined customer base;
• closed-community wallets, such as those for a membership organisation, a university or an employer;
• early-stage fintechs testing a wallet product before applying for full authorisation;
• platforms that hold modest user balances, such as marketplaces and payroll tools.

Apply for authorisation as an EMI from the outset if the business plan shows average outstanding e-money passing €5 million within two to three years, if the product needs payment initiation or account information, or if bank and card partners require an authorised firm. A business that only moves money, without holding balances, needs small payment institution registration or payment institution authorisation instead.

Only a body corporate, such as a limited company or a limited liability partnership (LLP), can register as a small EMI. Unlike a small payment institution, an individual cannot.

Sources: Electronic Money Regulations 2011, regulation 13; FCA: Electronic money institution applicants; FCA: Payment Services and Electronic Money, Our Approach (May 2026).

What a small EMI may do

A small EMI issues e-money and may provide payment services. Payments made with the e-money, such as a customer paying a bill from a wallet balance, are linked to the e-money and fall under the €5 million limit. Payment services offered separately from the e-money are “unrelated” and fall under the €3 million monthly limit.

• Issue and redeem at par. E-money is issued at face value as soon as funds are received, and the customer may cash it out at face value at any time (regulation 39).
• No interest. A small EMI may not pay interest, or any other benefit linked to how long a customer holds e-money (regulation 45).
• Distributors and agents. E-money may be distributed or redeemed through a distributor or agent, but never issued through one (regulation 33). An agent that provides payment services must be on the FCA register before it acts (regulation 34).
• No open banking services. Payment initiation and account information need authorisation.

Sources: Electronic Money Regulations 2011, regulations 13, 15, 19, 33, 34, 39 and 45; Schedule 2; FCA: Authorisation application fees; FCA FEES 4 Annex 11, 2026/27 periodic fees.

Three routes compared

A business that holds customer money in the UK usually chooses between these three FCA routes.

Sources: Electronic Money Regulations 2011, regulation 13; Schedule 2; FCA: Authorisation application fees; FCA FEES 4 Annex 11, 2026/27 periodic fees; FCA Handbook SUP 3A.1 (safeguarding audit); FCA: Payment Services and Electronic Money, Our Approach (May 2026).

Two contrasting examples

Two illustrative businesses, not clients, show where the €5 million line falls.

An employee benefits card: register as a small EMI

A UK company runs a prepaid card that employers load with staff benefits. It forecasts average outstanding e-money of €2 million by its third year and offers no separate payment services. It registers as a small EMI: a £1,130 fee and a £1,432 annual fee. Because its forecast passes €500,000, it holds initial capital of 2% of the projected average, €40,000. It safeguards every customer pound, files the monthly safeguarding return and, once it has safeguarded more than £100,000, plans for the annual safeguarding audit.

A consumer multi-currency wallet: apply for authorisation

A fintech offering consumers a multi-currency wallet with cards forecasts €12 million of average outstanding e-money in its second year and plans account information features. Both facts rule out registration. It applies for authorisation as an EMI: €350,000 of initial capital and a £5,640 fee. Its own funds at 2% of €12 million would be €240,000, so the €350,000 floor applies.

What the FCA requires

Regulation 13 of the Electronic Money Regulations 2011 sets the conditions for registration, and the FCA may refuse an applicant only if one of them is not met. Regulation 12 covers the application itself. An applicant shows all of the following.

• Legal form and location. A body corporate whose head office is in the UK. The FCA places the head office where the directors and senior managers take the main and day-to-day decisions and where central functions such as compliance sit.
• E-money limit. Average outstanding e-money not above €5 million. A new firm uses the figure projected in its business plan.
• Payment limit. A monthly average of unrelated payment transactions, including those of UK agents, not above €3 million over 12 months, projected for a new firm.
• Services. No payment initiation or account information services.
• Capital. Any initial capital required, held immediately before registration.
• Governance. Robust governance with clear lines of responsibility, and effective procedures to identify, manage, monitor and report risks, in proportion to the business.
• People. Directors and managers of good repute with appropriate knowledge and experience to issue e-money and provide payment services. Each is registered on the FCA’s individuals form, usually including the head of compliance and the MLRO.
• Business plan. A plan with a forecast budget for the first three years, showing systems, resources and procedures to operate soundly. Unrelated payment services need a separate plan.
• Safeguarding. Adequate measures to safeguard e-money holders’ funds.
• No relevant convictions. No one managing or operating the business convicted of money laundering, terrorist financing, sanctions, financial services or other financial crime offences.
• Money laundering registration. Inclusion in the register kept under the Money Laundering Regulations. For a small EMI the FCA is the supervisor, and the small e-money institution form covers both registrations.
• Controllers. Anyone holding 10% or more of the capital or voting rights, or able to exercise significant influence, is assessed as fit and proper on a qualifying holding form.

The FCA also checks that close links to other persons would not prevent effective supervision. A free pre-application meeting is available through the FCA’s Pre-Application Support Service.

Sources: Electronic Money Regulations 2011, regulations 12 and 13; FCA: Electronic money institution applicants; FCA: Apply for authorisation or registration as an e-money institution or payment institution; FCA: Payment Services and Electronic Money, Our Approach (May 2026).

Readiness checklist

An application is ready to submit when every item below can be evidenced.

• A forecast of average outstanding e-money at or below €5 million, and of unrelated payment transactions at or below €3 million a month.
• A capital calculation: none below €500,000 of average outstanding e-money, 2% of it from that level.
• A service list with no payment initiation or account information.
• A limited company or LLP with its head office and decision-makers in the UK.
• Named directors and managers, with CVs showing payments or e-money experience, and criminal record checks.
• Every controller holding 10% or more identified, with source of funds.
• An MLRO appointed and a business-wide money laundering risk assessment.
• A programme of operations and a flow of funds diagram that follows customer money from receipt to redemption, account by account.
• A business plan with a three-year budget, and a separate plan for any unrelated payment services.
• Policies written for the business: anti-money laundering and sanctions, safeguarding, governance and risk, incident reporting, sensitive payment data, security and complaints, and outsourcing where used.
• A bank that has agreed in principle to open the safeguarding account and countersign the acknowledgement letter.
• A wind-down plan showing how customer funds would be returned in an orderly closure.
• The £1,130 fee ready to pay on submission.

Sources: FCA: Electronic money institution applicants; FCA: Apply for authorisation or registration as an e-money institution or payment institution.

Safeguarding under CASS 15

Safeguarding means keeping customer money apart from the firm’s own money, so that customers are repaid if the firm fails. A small EMI must safeguard the funds it receives for e-money on the same terms as an authorised EMI. For funds received for unrelated payment services, safeguarding is optional; a small EMI that opts in follows CASS 15 for them as if it were an authorised EMI, and reconciles the two pools of money separately. From 7 May 2026 the FCA’s CASS 15 rules add the controls of a client money regime.

Our safeguarding service sets out the full arrangements.

Sources: Electronic Money Regulations 2011, regulations 20, 21 and 22; FCA Handbook CASS 15; FCA Handbook CASS 10A (resolution pack); FCA Handbook SUP 3A.1 (safeguarding audit); FCA Handbook SUP 16.13, 16.14A and 16.15; FCA PS25/12: changes to the safeguarding regime for payments and e-money firms; FCA: Payment Services and Electronic Money, Our Approach (May 2026).

Timing

Regulator figures are quoted as published and converted to months. The FCA’s median covers authorisations as well as registrations; a small EMI registration is a lighter assessment. Our realistic timeline assumes a complete, well-prepared application with the safeguarding bank named.

Sources: Electronic Money Regulations 2011, regulations 9 and 15; FCA: Apply for authorisation or registration as an e-money institution or payment institution; FCA authorisations operating service metrics, 2026/27 Q1.

FCA approval data

The FCA reports payment and e-money registrations and authorisations together, and publishes the share of e-money applications it approves or registers each year.

Sources: FCA authorisations operating service metrics, 2026/27 Q1; FCA: Apply for authorisation or registration as an e-money institution or payment institution.

What it costs in the first year

The regulator’s own charges and requirements for the first year, before any staff, technology or advisory costs.

Sources: FCA: Authorisation application fees; FCA FEES 4 Annex 11, 2026/27 periodic fees; FCA FEES 4.2.7F (first-year fee); Electronic Money Regulations 2011, Schedule 2; Companies Act 2006, section 478; FCA Handbook SUP 3A.1 (safeguarding audit).

Capital at 2% of average outstanding e-money works out as follows.

Adding services to the registration later costs half the category 3 fee, £565; removing services costs nothing. The Financial Ombudsman Service levy is collected alongside the FCA annual fee.

Sources: Electronic Money Regulations 2011, Schedule 2; Electronic Money Regulations 2011, regulation 19; FCA: Authorisation application fees; FCA PS26/14: regulated fees and levies 2026/27.

Why applications are delayed or refused

The FCA publishes the reasons it rejects or returns applications, and they apply to registration as they do to authorisation.

1. The wrong fee or missing minimum information. The FCA rejects these without assessment and the applicant starts again.
2. Generic policies. Policies must be tailored to the business model, not taken from templates.
3. Unanswered form questions. Every question needs an answer; where one does not apply, the supporting documents explain why. Gaps stop the clock while the FCA asks.
4. The wrong application. A firm moving between registration and authorisation submits a new application of the right type, or it is rejected.

Sources: FCA: Apply for authorisation or registration as an e-money institution or payment institution.

When the FCA cancels a registration

Registration is kept, not just obtained. The FCA may cancel a small EMI’s registration and remove it from the register where, among other grounds, the firm:

• does not issue e-money within 12 months of registration;
• stops business for more than six months;
• no longer meets, or is unlikely to meet, the registration conditions or the €5 million and €3 million limits;
• does not tell the FCA of a major change in circumstances relevant to those conditions;
• obtained its registration through false statements; or
• should be cancelled to protect consumers.

The FCA gives a warning notice first, and the firm may refer a decision to cancel to the Upper Tribunal. The FCA’s rules on complete and timely reporting, and on failure to submit reports, apply to small EMIs as they do to authorised firms.

Sources: Electronic Money Regulations 2011, regulations 10, 15 and 37; FCA Handbook SUP 16.13, 16.14A and 16.15.

Moving up to an authorised EMI

A small EMI applies for authorisation as an EMI when its average outstanding e-money or unrelated payment volumes are set to pass the limits, or when it wants payment initiation or account information services. If it stops meeting the limits, the location condition or the convictions condition, it must apply within 30 days of becoming aware of the change if it intends to keep issuing e-money in the UK (regulation 16).

There is no conversion. The FCA treats a move from registered to authorised as a new application, not a variation of the registration. Authorisation brings initial capital of €350,000, own funds of the higher of €350,000 or 2% of average outstanding e-money plus capital for unrelated payment services, a £5,640 fee and the same three-month statutory period.

To prepare, a small EMI tracks its e-money and payment volumes against the limits every month, raises the €350,000 ahead of submission, strengthens its board and compliance function to the authorised standard, and updates its policies, forecasts and wind-down plan for the larger business. We plan the move against your business plan so authorisation is in place before you reach the limits.

Sources: Electronic Money Regulations 2011, regulations 16 and 19; Schedule 2; FCA: Apply for authorisation or registration as an e-money institution or payment institution; FCA: Authorisation application fees.

After registration: what a small EMI files

The Consumer Duty applies to services for retail customers, and communications with customers must be clear, fair and not misleading.

Sources: FCA Handbook CASS 15; FCA Handbook SUP 16.13, 16.14A and 16.15; FCA Handbook SUP 3A.1 (safeguarding audit); FCA PS25/19: changes to complaints data reporting; Electronic Money Regulations 2011, regulations 34 and 37; FCA: Electronic money institution applicants; FCA: Payment Services and Electronic Money, Our Approach (May 2026).

Banking and cards

A small EMI needs a safeguarding account that meets the acknowledgement letter requirement, an operating account for its own money and settlement accounts in the currencies it issues. Banks run their own checks on e-money firms; a clear business plan, a named MLRO and a written safeguarding procedure make that review faster. Cards are usually issued through a principal member of Visa or Mastercard, often called a BIN sponsor, or through a card programme manager, and the business plan models their pricing and minimum volumes. We open each account alongside the application. See banking and payment processing.

Common questions

References

1. FCA: Electronic money institution applicants
2. FCA: Apply for authorisation or registration as an e-money institution or payment institution
3. FCA: Authorisation application fees
4. FCA Handbook FEES 4 Annex 11: periodic fees for payment services and e-money, 2026/27
5. Electronic Money Regulations 2011, regulation 13 (conditions for registration)
6. Electronic Money Regulations 2011, regulation 12 (application for registration)
7. Electronic Money Regulations 2011, regulation 15 (decision period and cancellation applied to registration)
8. Electronic Money Regulations 2011, regulation 9 (decision period)
9. Electronic Money Regulations 2011, regulation 16 (application for authorisation when conditions cease to be met)
10. Electronic Money Regulations 2011, regulation 19 (own funds)
11. Electronic Money Regulations 2011, Schedule 2 (capital)
12. Electronic Money Regulations 2011, regulation 2 (average outstanding electronic money)
13. Electronic Money Regulations 2011, regulation 20 (safeguarding)
14. Electronic Money Regulations 2011, regulation 21
15. Electronic Money Regulations 2011, regulation 33
16. Electronic Money Regulations 2011, regulation 34
17. Electronic Money Regulations 2011, regulation 37
18. Electronic Money Regulations 2011, regulation 10
19. Electronic Money Regulations 2011, regulation 39
20. Electronic Money Regulations 2011, regulation 45
21. FCA Handbook CASS 15
22. FCA Handbook CASS 10A (resolution pack)
23. FCA Handbook SUP 3A.1 (safeguarding audit)
24. FCA Handbook SUP 16.13, 16.14A and 16.15
25. FCA: Payment Services and Electronic Money, Our Approach (May 2026)
26. FCA PS25/12: changes to the safeguarding regime for payments and e-money firms
27. FCA PS26/14: regulated fees and levies 2026/27
28. FCA PS25/19: changes to complaints data reporting
29. FCA authorisations operating service metrics, 2026/27 Q1
30. FCA FEES 4.2.7F (first-year fee)
31. Companies Act 2006, section 478

This guide is general information, not legal advice. Requirements and fees change, and the regulator’s own publications take precedence.