Electronic Money Institution EMI:
How to Get Licensed, Sponsored, or Acquire Access
An Electronic Money Institution EMI license is one of the most powerful regulatory authorizations in European and UK financial services. It lets you issue electronic money, provide payment services, hold customer funds, and build payment products on top of a regulated foundation. It is also one of the most sought-after and most misunderstood licenses in the industry. Getting an Electronic Money Institution EMI license the right way, or accessing EMI infrastructure through a sponsor or acquisition, is exactly what Faisal Khan LLC helps with. This page explains what an EMI license is, who needs it, and the three realistic pathways to access it.
What Is an Electronic Money Institution?
An Electronic Money Institution is a company authorized by a financial regulator to issue electronic money (e-money) and provide payment services. In the UK, the FCA (Financial Conduct Authority) grants EMI authorization. In the EU, each member state's national competent authority does so under the Electronic Money Directive (EMD2).
E-money is digital stored value issued against receipt of funds. When you top up a prepaid card, load a digital wallet, or fund a payment account, you are receiving e-money issued by an EMI. The company that issued it must be authorized as an EMI or registered as a small EMI.
An EMI license typically covers:
Issuance of electronic money
Payment initiation services
Account information services
Money remittance
Card payment processing services (issuing and acquiring)
Execution of payment transactions
This breadth makes the EMI license the go-to authorization for fintechs, neobanks, payment companies, and cross-border operators building anything that touches customer funds in Europe or the UK.
Learn more about the E-Money Licensing:
EMI vs. Payment Institution: What Is the Difference?
A Payment Institution (PI) can provide payment services but cannot issue e-money. An EMI can do both. If your business model involves issuing stored-value products, prepaid cards, digital wallets, or any product where you hold customer funds in an e-money account, you need an EMI license, not just a PI license.
If you only provide payment services without issuing e-money (for example, you process payments but do not hold funds), a Payment Institution license may be sufficient.
We assess your business model and advise on which authorization is appropriate before any application is started. Getting this wrong means applying for the wrong license and starting over.
The Three Ways to Access an EMI License
Path 1: Apply for Your Own EMI Authorization
Applying for an EMI license in the UK or EU is a serious regulatory project. Regulators want to see that you have the people, capital, systems, and policies in place to protect customers and operate compliantly before they grant authorization.
UK FCA EMI Authorization requirements include:
Minimum initial capital of EUR 350,000 (for full EMI; EUR 50,000 for small EMI registration)
Safeguarding arrangements for customer funds (held at a credit institution in a segregated account)
A written AML/KYC policy and governance framework
Fit and proper assessments on all directors and significant shareholders
Business plan, financial projections, and flow of funds documentation
A compliance monitoring program
Operational resilience plans
EU EMI Authorization follows a broadly similar framework but is processed by the national competent authority of the jurisdiction where you incorporate. Lithuania (Bank of Lithuania), the Netherlands (DNB), and Ireland (Central Bank) are among the most active jurisdictions for fintech EMI applications. Each has its own processing times and documentation standards.
Timeframe: 6 to 18 months for UK FCA. 6 to 24 months for EU, depending on jurisdiction and application quality.
We connect clients to EMI-specialized regulatory counsel, help structure the application package, and advise on jurisdiction selection based on your target markets and business model.
Path 2: Become an EMI Distributor (EMD) or Authorized Agent
You do not have to hold an EMI license to distribute e-money or offer payment services under one. Authorized EMIs can appoint distributors and agents to act on their behalf.
In the UK, this is called an E-Money Distributor (EMD). An EMD distributes e-money on behalf of an authorized EMI. The EMI remains responsible for the distributor's compliance with the EMD framework. As an EMD, you can offer the EMI's products to your customers without holding your own EMI license.
In the EU, Payment Institutions and EMIs can appoint authorized agents to provide payment services on their behalf. The agent is registered with the regulator through the principal institution and operates within the principal's regulatory perimeter.
Two types of arrangement:
Agent-based (in the flow of funds): You handle customer interactions, onboarding, and in some structures, fund collection. You are operationally embedded in the payment flow. The EMI provides the regulatory infrastructure.
Non-agent-based (not in the flow of funds): You refer customers or provide a service layer on top of the EMI's infrastructure without touching funds yourself. This is common for software companies and platforms that want to offer payment features without handling money directly.
Timeframe: Weeks to a few months, depending on the EMI's onboarding process.
This is the most common entry route for startups and fintechs that need regulated payment infrastructure quickly. Many businesses operate as an EMD or agent while their own license application is in progress, then transition to their own license once approved.
We connect you to authorized EMIs willing to take on distributors and agents across the UK and EU, and help you structure the commercial and compliance terms of the arrangement.
Path 3: Acquire a Company That Holds an EMI License
EMI licenses belong to the legal entity that holds them. Acquiring that entity gives you control of the license, subject to regulatory approval of the change of control. This is significantly faster than a new application when speed is a priority and a suitable acquisition target exists.
What this involves:
Identifying a licensed EMI entity in the target jurisdiction that is available for acquisition
Regulatory due diligence on the license portfolio, compliance history, and outstanding regulatory matters
Structuring the share purchase agreement with appropriate regulatory conditions
Filing change of control notifications with the FCA (UK) or national competent authority (EU)
Obtaining regulatory approval before the change of control completes
Regulatory approval timelines for change of control vary. UK FCA processes these in 60 to 90 working days under normal circumstances. EU timelines vary by jurisdiction.
We source licensed EMI entities available for acquisition, advise on regulatory due diligence, and connect you to financial services M&A counsel with specific experience in EMI and payment institution license transfers.
Safeguarding: The Non-Negotiable EMI Obligation
Every EMI must protect customer funds through a process called safeguarding. This means holding customer funds separately from the EMI's own money, in designated accounts at credit institutions.
Safeguarding is not optional and it is not trivial. The FCA and EU regulators treat safeguarding failures as serious enforcement matters. Getting the right bank to open a segregated safeguarding account for an EMI is itself a significant challenge, because most banks are reluctant to serve payment company clients.
If you are pursuing an EMI license, you need both the authorization and the banking infrastructure to support it. We advise on both and connect clients to banking solutions appropriate for EMI safeguarding obligations.
Frequently Asked Questions
Can a non-UK or non-EU company hold an EMI license?
The legal entity holding the license must be incorporated in the UK (for FCA authorization) or in an EU member state (for EU authorization). However, that entity can be owned by a non-UK or non-EU parent company, subject to fit and proper assessments of the ultimate beneficial owners.
What is the difference between an authorized EMI and a registered small EMI?
A small EMI in the UK is registered rather than authorized. It has a lower capital requirement and simpler regulatory obligations, but it cannot passport or provide services across borders, and it has a monthly average outstanding e-money limit. If your business will scale beyond the limits or needs cross-border reach, full EMI authorization is the right path.
How long does it take to become an EMD under an existing EMI?
This depends on the EMI's own onboarding process and internal due diligence. For well-prepared businesses, EMD registration can be completed in 4 to 12 weeks after the EMI accepts you as a distributor. The EMI registers you with the FCA as their distributor.
Can we operate as an EMD while our own EMI application is pending?
Yes, and this is a very common strategy. Operating as an EMD gives you legitimate access to regulated payment infrastructure while your own application progresses. Once your authorization is granted, you transition to operating under your own license. We structure both pathways in parallel for clients who need to move fast.
Get Access to an Electronic Money Institution EMI License
An Electronic Money Institution EMI license is the foundation of any serious European or UK payment business. Whether you want to apply for your own authorization, operate as an EMD or agent under an established EMI while your application proceeds, or acquire a licensed entity outright, all three paths are viable and we have experience with each. Faisal Khan LLC does not hold or issue EMI licenses. We advise on strategy, connect you to regulatory counsel and banking infrastructure, and introduce you to EMIs willing to take on distributors or to licensed EMI entities available for acquisition.