How to obtain the E-Money License.
EMI (Electronic Money Institution) and PSP (Payment Service Provider) are the most popular license types allowing their holders to provide payment services. These permits also enable you to engage in the following activities:
- Launch your e-wallet;
- Issue physical and virtual payment cards;
- Start an online bank.
What EMI and PSP are
EMI is the second most complete license (after banking) issued to legal entities for operations with electronic funds. This permit allows you to issue electronic money, open e-wallets, and proceed with other digital financial transactions without the need to function as a bank in the usual sense of this term.
E-money producers operate using virtual currency issued by themselves in exchange for monetary assets (fiat money) received from clients. They can also proceed with payments to other producers’ clients willing to accept their electronic money. The producer, in their turn, shall repurchase the e-money from any holder and at any time, as per the client’s request. The digital funds exist both on physical (smart cards) and virtual (payment system servers) media.
PSP is issued to legal bodies and enables them to effect payments under their registration and license. This permit is usually granted to processing companies that act as financial intermediaries in the course of clients’ payment processing. I.e. such companies act as channels for funds that are not the property of the payment system.
The payment institution, as an intermediary, can organize clients’ payment collection, e.g. for mobile carriers, public utility companies, online stores, etc., and distribute the funds among them.
Requirements for EMI/PSP
The regulatory authorities issuing EMI/PSP permits set forth strict requirements for the personnel. As per the EU directive, should the claimant apply for a European Union country permit, they must appoint managing directors. Experience has shown that in most cases at least two persons are required. They must possess relevant background working in finances and provide proof of qualification in such fields as Economics, Management, Business, or Law.
The reputation of the founders and managers is of great importance as well. For this reason, they are subject to a check-up to detect any possible issues with the law. The regulators also require the documents that support the legal source of your income and confirm timely tax payments.
Countries advisable for EMI/PSP license application
SBSB FinTech Lawyers assist with the application for payment system permits in various regions (including the offshore zones), such as:
- Europe – the Czech Republic, Lithuania, Latvia, Malta, Poland, Portugal, Spain, Switzerland, the United Kingdom;
- Asia – Hong Kong, Singapore, the UAE
- North America – Canada;
- Central America – Belize.
We provide “turnkey” legal aid for your ideas (including a payment system development) without any bureaucracy. Our lawyers have hands-on experience obtaining EMI/PSP permits; we shall support you at every stage of the license application and help you choose the best jurisdiction.