Electronic Money Institution Licence - United Kingdom
E-money issuance under the Electronic Money Regulations 2011, the two tiers, and the obligations that follow authorisation.
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The short answer
Issuing electronic money in the United Kingdom requires authorisation or registration by the Financial Conduct Authority under the Electronic Money Regulations 2011. E-money is electronically stored monetary value, issued on receipt of funds, accepted by a person other than the issuer, and redeemable at par at any time. A stored balance a customer can spend with third parties is e-money; a prepayment held for the issuer's own services generally is not.
An authorised e-money institution holds initial capital of EUR 350,000 and calculates ongoing own funds on the outstanding e-money float. A small e-money institution is available below the regulatory thresholds and carries lighter capital requirements but a volume ceiling and no cross-border rights.
An e-money institution can also provide payment services. A payment institution cannot issue e-money. That asymmetry, rather than cost, is usually the deciding factor between the two permissions.
Key facts
Is your product actually e-money?
The perimeter question decides the whole licensing strategy. If customers hold a stored balance they can use to pay third parties, and can redeem at par on demand, the firm is issuing e-money and needs an e-money permission. If the firm only executes payment transactions on funds that pass through, a payment institution permission is sufficient and cheaper.
Programme managers distributing cards under another institution's licence are not issuing e-money themselves, but the arrangement makes them an agent or distributor of the issuer, with registration and conduct consequences. Firms often reach the point where distribution economics justify their own authorisation, and that is a project, not a paperwork change.
Capital, own funds and safeguarding
- •Initial capital of EUR 350,000 for an authorised e-money institution, held from authorisation and maintained thereafter
- •Own funds of at least 2 per cent of average outstanding e-money under Method D, plus the relevant payment services own funds requirement for unrelated payment services
- •Relevant funds safeguarded by segregation in a designated account with an authorised credit institution, or by an insurance policy or comparable guarantee
- •From 7 May 2026, CASS 15 records and reconciliations, the resolution pack and an annual safeguarding audit
- •Adequate resources and wind-down planning assessed as part of the application, not after it
Governance and UK substance
The FCA assesses the individuals who will actually run the business. That means UK-based directors and senior managers with demonstrable experience of the specific model, a compliance function with capacity for the volumes forecast, and a money laundering reporting officer who is genuinely in the business rather than nominally appointed.
The business plan and financial forecasts must reconcile with the own funds calculation, the safeguarding model and the operational resilience arrangements. Inconsistency between those documents is the most common reason an application stalls in information requests.
Ongoing obligations after authorisation
- •Redemption at par on request, with terms that do not impose disproportionate charges or conditions
- •Safeguarding reconciliations, the CASS 15 resolution pack and the annual safeguarding audit
- •RegData reporting, including e-money returns and the safeguarding return
- •Change in control approvals, senior management appointments and material change notifications
- •Financial crime framework review, transaction monitoring calibration and periodic risk assessment refresh
Definitive guides for this market
UK Electronic Money Institution licence
Full EMI authorisation: capital, own funds, safeguarding, governance and process.
UK Small Electronic Money Institution
The registration route below the regulatory thresholds.
UK Authorised Payment Institution licence
Where the model executes payments but does not issue e-money.
Safeguarding and CASS 15 advisory
Safeguarding design, reconciliation frameworks and audit readiness.
Ongoing compliance support
Reporting, monitoring and regulator engagement after authorisation.
Primary sources
- Electronic Money Regulations 2011 (SI 2011/99)
- FCA: payment services and electronic money approach document
- FCA PS25/12: safeguarding rules for payment and e-money firms (CASS 15)
Last reviewed by the Regulatory Counsel team on 28 August 2026.
Frequently Asked Questions
An authorised e-money institution holds initial capital of EUR 350,000 and must thereafter hold own funds of at least 2 per cent of average outstanding e-money under Method D, together with the applicable own funds requirement for any unrelated payment services.
An e-money institution can issue electronic money and can also provide payment services. A payment institution can only provide payment services. If customers hold a redeemable stored balance, the firm needs an e-money permission.
No. Neither a small e-money institution nor an authorised UK e-money institution has EEA passporting rights. EEA activity requires authorisation from an EEA national competent authority.
The FCA confirmed the new safeguarding regime for payments and e-money firms in policy statement PS25/12, with the CASS 15 rules applying from 7 May 2026. Firms should treat the intervening period as an implementation project covering records, reconciliations, the resolution pack and the audit.
The FCA expects the head office and effective direction of the business to be in the United Kingdom. In practice that means UK-based directors and senior managers with real authority over the regulated activity.