An electronic money institution (EMI) is a type of financial institution that is authorized to issue electronic money (e-money), which is a digital representation of monetary value that is accepted as a means of payment by other parties. E-money can be used to make payments for goods and services, to transfer funds between accounts, or to withdraw cash from ATMs.
Under the EU’s Electronic Money Directive (EMD), all EMIs are subject to the same basic requirements, regardless of their size. However, the EMD does provide for certain exemptions and simplifications for small EMIs, which are defined as EMIs that meet the following criteria:
- The EMI has issued electronic money with an annual average outstanding amount of not more than €5,000,000 over the preceding 12 months.
- The EMI’s annual turnover from the issuance of electronic money does not exceed €2,000,000.
- The EMI is not owned by, nor connected to, any credit institution or electronic money institution.
If an EMI meets these criteria, it may be eligible for certain exemptions and simplifications, such as reduced reporting and disclosure requirements, and reduced capital requirements. However, small EMIs are still subject to all of the other requirements of the EMD, including those related to financial stability, consumer protection, and anti-money laundering.
In summary, the main difference between a small EMI and an EMI is that a small EMI is an EMI that meets the criteria for certain exemptions and simplifications under the EMD, while an EMI is a financial institution that is authorized to issue e-money but may not necessarily meet the criteria for these exemptions and simplifications.
This page was last updated on January 3, 2023.