What is Electronic money institution?

An electronic money institution (EMI) is a regulated firm that issues electronic money and payment accounts without a full bank charter.

Electronic money institution

An electronic money institution (EMI) is a firm authorised to issue electronic money and operate payment accounts under specialised payments regulation rather than a full deposit-taking bank licence.1 In the UK and EU, many early neobanks and fintechs—including Wise and early Revolut—operated as EMIs before or instead of becoming banks.

Overview

EMIs hold customer funds as electronic money, typically safeguarded (segregated) rather than used for balance-sheet lending like a bank. They can offer IBANs/payment accounts, cards and FX, but face limits on deposit-like products and credit compared with licensed banks.

Versus banks and partner banks

A licensed neobank such as Monzo takes deposits and can lend. An EMI issues e-money. A partner-bank fintech may own the app while a bank or EMI sits underneath. Customers often experience these models similarly inside a mobile app.

Examples

Wise is a canonical multi-currency EMI-style business. Qonto and other European business finance apps have used e-money or specialised licences. Some firms upgrade from EMI to bank status over time (Revolut).

External links

fca.org.uk

References

Electronic money institutions are authorised under EU/UK e-money and payments rules to issue electronic money. https://www.fca.org.uk/firms/electronic-money-payment-institutions

Frequently asked questions

What is Electronic money institution?: An electronic money institution (EMI) is a regulated firm that issues electronic money and payment accounts without a full bank charter.