UK Electronic Money Institution Licence (EMI Licence)
Expert advisory on UK Electronic Money Institution (EMI) licensing from the FCA. £350,000 capital, e-money issuance, wallets and prepaid cards.
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What is the UK Electronic Money Institution Licence?
The UK Electronic Money Institution (EMI) licence authorises firms to issue electronic money — digital stored value held on behalf of customers and used for payment transactions — and to provide the full range of payment services available to authorised payment institutions. An EMI can do everything an API can do, plus issue e-money.
This enables digital wallets, prepaid cards, multi-currency accounts (the Revolut model), stored value platforms and any product where customers load funds that are held as electronic money. The EMI licence is issued by the Financial Conduct Authority under the Electronic Money Regulations 2011 (EMR 2011).
The distinction between payment services and e-money issuance is fundamental: payment institutions process transactions but do not hold value; electronic money institutions both hold value and process transactions. This dual capability makes the EMI licence the most versatile authorisation in the payments sector, but it also carries the highest regulatory burden — particularly around safeguarding of customer funds.
Who Needs UK Electronic Money Institution Licence?
The EMI licence is required by any firm that issues electronic money in the UK or that wishes to offer products involving stored customer value.
- —Digital wallet providers (consumer and business wallets)
- —Prepaid card issuers (Visa/Mastercard programme managers)
- —Multi-currency account providers (Revolut-model businesses)
- —Stored value platforms for gaming, loyalty or marketplace escrow
- —Firms offering customer accounts where value is held as e-money
- —Any business enabling customers to load, store and transact with digital funds
A common misconception is that firms providing "payment accounts" do not need EMI authorisation if they describe the product differently. The FCA looks at the substance of the arrangement, not the label. If customers can load funds into an account, hold those funds and use them to make payments, the product is likely e-money regardless of how the firm markets it.
Key Requirements
Initial Capital
£350,000 initial capital for Authorised EMI (AEMI) — significantly higher than the API requirement due to the e-money issuance permission. Capital must be fully paid up at the time of application submission. Ongoing own funds must be maintained at the higher of the initial capital floor (£350,000) or 2% of average outstanding e-money.
Governance & Fit and Proper
Full management body fitness and propriety assessment. At least two directors with collective competence in e-money, payments, compliance and risk. MLRO appointed as SMF17. A credible wind-down plan is required demonstrating how e-money holders would be repaid in full in the event of orderly failure.
AML & Financial Crime Controls
Same obligations as authorised payment institutions — MLRs 2017 in full. Additionally, JMLSG sector guidance on e-money products applies, including specific obligations around anonymity limits on e-money instruments, enhanced due diligence for high-value e-money products and monitoring of e-money redemption patterns for suspicious activity.
Safeguarding
PS25/12 applies with additional complexity for EMIs because outstanding e-money (float) must be safeguarded at all times. This requires: statutory trust structure, daily calculation and reconciliation of the safeguarding requirement, segregated account at an FCA-approved credit institution with written acknowledgement, monthly reporting return and annual independent audit. Safeguarding is more complex for EMIs than PIs because the float fluctuates continuously.
Operational Requirements
Comprehensive IT systems, business continuity arrangements, outsourcing governance and operational resilience frameworks. EMIs handling card programmes must also comply with card scheme operational requirements.
Small EMI Threshold
Small EMI (SEMI) registration is available for firms with average outstanding e-money below €5 million and average monthly payment transactions below €3 million. SEMI registration involves no minimum capital requirement but carries identical AML and safeguarding obligations.
The Application Process
Permission Scoping and Capital Planning
Regulatory Counsel confirms e-money issuance as the primary regulated activity, maps all additional payment service permissions required and plans the capital structure. The £350,000 initial capital must be fully paid up at submission — we advise on funding structure and timing. Timeline: 2 weeks.
Corporate Structure and Governance Build
We appoint the management body with fit and proper credentials, MLRO as SMF17 and wind-down planner. All Individual Questionnaires are prepared. The management body must demonstrate collective competence in e-money, compliance and risk management. Timeline: 4–6 weeks.
Safeguarding Bank Engagement
We identify and approach FCA-approved credit institutions for a segregated safeguarding account. This is the most commonly underestimated step — banks are cautious about onboarding EMIs and the process can take 8–12 weeks. Written acknowledgement must be obtained before submission. Timeline: 4–8 weeks (in parallel).
AML Programme, Safeguarding Methodology and Wind-Down Plan
We build the EMR-compliant AML programme, daily safeguarding calculation methodology per PS25/12 and a credible wind-down plan covering e-money holder repayment. The wind-down plan must demonstrate a clear methodology for repaying all e-money holders within a defined timeframe. Timeline: 4–6 weeks.
Regulatory Business Plan and Financial Projections
Financial projections must be internally consistent — e-money float forecasts, revenue model, capital adequacy calculations and customer acquisition assumptions must all align. The FCA scrutinises EMI business plans more closely than PI applications due to the higher risk to consumers. Timeline: 3–4 weeks.
FCA Connect Submission and Assessment
Regulatory Counsel submits the completed application and manages all FCA correspondence, information requests and assessment meetings. EMI applications typically take 6–18 months for assessment due to their complexity. Timeline: 6–18 months.
Total expected timeline: 8–20 months from instruction to authorisation.
Why Applications Fail — and How We Prevent It
Inadequate Safeguarding Methodology
EMIs must demonstrate specifically how they will calculate and safeguard the daily safeguarding requirement — the amount of outstanding e-money that must be segregated at all times. Generic safeguarding policies without a clear methodology for daily calculation, reconciliation and reporting are rejected by the FCA.
Business Plan Disconnect
E-money float projections that are not consistent with the revenue model or customer acquisition plan trigger immediate FCA challenge. If the business plan projects 100,000 customers but the marketing budget implies 10,000, the FCA will identify the inconsistency. Internal consistency is rigorously checked for EMI applications.
Banking Partner Not Confirmed
EMI applications submitted without a credible pathway to a safeguarding bank account are routinely declined. Banks are increasingly reluctant to onboard EMIs, and this relationship must be established — with written acknowledgement obtained — before submission. This is the single most underestimated step.
Underestimating Wind-Down Planning
The FCA expects a detailed, credible wind-down plan for EMIs given the direct risk to e-money holders. The plan must demonstrate how all e-money holders would be repaid in an orderly manner within a defined timeframe. Generic templates are rejected — the FCA expects a wind-down plan that reflects the specific product architecture and customer base.
How Regulatory Counsel Can Help
End-to-End Application Management
We manage every aspect of the EMI application — from capital planning and safeguarding bank engagement through to FCA submission and assessment management.
Regulatory Business Plan
We draft an internally consistent regulatory business plan with aligned e-money float projections, revenue model, capital adequacy and customer acquisition strategy.
Ongoing Compliance Support
Post-authorisation compliance support including daily safeguarding oversight, RMAR reporting, wind-down plan maintenance and PS25/12 annual audit coordination.
Regulatory Counsel has deep expertise in electronic money licensing, having advised on EMI authorisations across the UK and EU. We understand the specific challenges of EMI applications — particularly safeguarding bank engagement and wind-down planning — and our structured approach is designed to address these challenges before they become blockers.
Frequently Asked Questions
£350,000 initial capital, which must be maintained on an ongoing basis. In addition, an AEMI must maintain own funds calculated as the higher of the fixed £350,000 floor or a percentage-based calculation of average outstanding e-money and payment transaction volumes.
AEMIs must safeguard relevant funds — e-money float and payment transactions in transit — by placing them into a statutory trust at an FCA-approved credit institution. The trust requires a Board resolution, a trust declaration, and written acknowledgement from the safeguarding bank. Daily reconciliation and annual independent audit are mandatory.
No. EEA passporting rights for UK-authorised firms ended with Brexit. To provide e-money services across EU member states, a separate EU EMI authorisation — typically under Irish, Lithuanian or Dutch regulation — is required. Regulatory Counsel advises on EU EMI authorisation.
A Small EMI is subject to a €5 million cap on average outstanding e-money and cannot passport. An AEMI has no volume cap and held EEA passporting rights before Brexit. AEMIs require £350,000 capital; Small EMIs have no minimum capital. Safeguarding and AML obligations are identical for both.
The FCA requires a credible wind-down plan demonstrating how e-money holders would be repaid in an orderly failure. This includes a recovery and resolution strategy, the safeguarding unwinding procedure, and evidence that e-money float could be returned to holders within a defined period. Generic templates are rejected.