Payment Providers and Electronic money licenses

What is EMI?

EMI – Electronic Money Institution (or Issuer) is a legal entity that has the right to issue electronic money and to make payments related to electronic money.

What legal basis the company has the right to issue electronic money?

Only after obtaining a special financial license (Electronic Money License) legal entity is entitled to engage in the issue of electronic money and provide services associated with it.

The European Parliament and the Council approved a directive that has been adapted by the majority of European countries. The Act on payment services and electronic money defines a new kind of financial market participants – electronic money issuer.

What services can provide EMI? 

Electronic money issuer conducts its activities through electronic (virtual) money issued by him, in exchange for the funds received from its customers. Customers receiving electronic money in exchange for their cash, can make payments to other issuerclients, ready to accept the electronic moneyfor their services or products.

Issuer issuing electronic money, undertakes to buy off electronic money at any holder of electronic money at any moment.

There are the two main forms of existence of electronic money in physical form determined – smart cards, and virtually server in payment system.

1. The client makes a payment to the bank account of the Issuer
2. The issuer issues electronic money, and this amount of e-money appearson the client account
3. Actions for the acquisition of electronic money are being doneby other customers of the Issuer as well
4. By using the system of electronic money, customers are paying to traders after buying their products or services
5. The trader receives the electronic money as payment for their goods or services
6. The trader transmits the electronic money within the system to its suppliers, who are also clients of the Issuer
7. Supplier sells electronic money, and the Issuer pays off his electronic money and transfers money by bank transfer from their bank account to the bank account of the supplier

The main difference between the use of electronic money and the use of payment services is that the issuer customer has the electronic money account in the issuer payment system, and the client uses it in order to:

• Acceptance of electronic money as payment for their services or goods
• Accumulation of funds from a large number of small payments
• Division of large payments and using parts for different purposes
• Conversion of e-money from one currency to another
• Storage of funds for unlimited time
• Mutual settlements with suppliers who are also customers of the Company
• Implementation of electronic money and getting real money to your bank account

What countries we can assist you in obtaining EMI licenses? 

Czech Republic, Lithuania, Great Britain, Poland, Latvia, Cyprus, Malta, Georgia and other countries.

Detailed information about each country you can fing down this page.

Like an option of offshore and not much expensive jurisdiction we propose Belize.

The requirements and restrictions on issuer of electronic money

According to accepted legislation there are several restrictions for electronic money issuer.

In various European countries, these limits and restrictions may vary.

For example, in Latvia, if the business plan prescribes the amount of issued electronic money that does not exceed 2 million euros per year, the company can start operating without a license on the basis of registration. In the Czech Republic the size of issued electronic money equal to 5 million euros.

After exceeding the data limit, the issuer of electronic money is required to obtain a full license, to fill the authorized capital, which should reach at least 350 thousand euros, as well as undergo PCI DSS certification. The definition of PCI DSS certification can be found here (availiable only in russian).

More details about the requirements and documents can be provided to the clients at the meeting, when we see that the option of getting a full license is necessary indeed.

Difficulties in obtaining a EMI license

Typically, customers who apply for the establishment of their electronic money institutions, are ready to register the financial company and get all the necessary documents. Many customers are already experienced as providers of such services. The main problem in obtaining a license for the electronic money may be searching for qualified personnel.

Without qualified staff it will be impossible to obtain a license for electronic money. Usually in any EU country where we apply for a license (Malta, Czech Republic, Cyprus, Latvia, Estonia, Germany), the regulator will check carefully managers (directors) provided who will manage the company. According to the EU directive there must be a minimum of two directors. And both must be resident in the EU. In some countries, you can apply one of the EU resident and another resident of CIS.

The experience and qualifications of directors of the company must be confirmed by certificates, diplomas, certificates and other documents that the regulator will check for the validity.

The education of directors cannot be technical, but financial, economic, international, and similar higher education.

We help our clients in searching European managers for electronic money companies.

If you are planning to establish an electronic money company, as an option we offer to do it as following:

Implement registration of the company and work on the basis of a small license (or company registration). In this case you need to prepare a smaller set of documents, which on one hand simplifies the process of passing the necessary procedures for start-up, on the other hand – will allow to find and settle all of possible claims regarding board members and commercial plan on the primary stage (the basis of which will then be used for obtaining full license)and at the third party – will allow you to get acquainted with regulator as a company to facilitate the eventual procedure of license obtaining.

A list of countries where we obtain EMI licenses can be found below.

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Need Help?

Call us +38 (044) 379-30-62

Write us info@sb-sb-com

Key words: Obtaining a license for electronic money, a European license for electronic money, e-money license, EMI, license for electronic payments, Electronic money institution, payment license.