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How to get an EMI license for a payment system

How to get an EMI license for a payment system

After the appearance in financial institutions of such a phenomenon as electronic money and transfer systems, the development of the banking sector took on a new direction. Banks were no longer monopolies in the transfer of funds between countries, individuals and legal entities. This made it possible to significantly speed up the transfer process - if previously SWIFT - transfer between countries took about three working days, now the money is received almost instantly. EMI was originally conceived as a competition for traditional banks. However, it turned out that new technologies are equally interesting to banking structures, which have become unprofitable to remain cumbersome and slow. Moreover, the emergence of electronic money entailed a significant reduction in the cost of each transaction.

In fact, the new technology has made it possible to diversify financial service providers - now it can be not only banks, but also any company that has received a license for this type of activity.

What is an EMI license?

EMI itself is an Electronic Money Institution, i.e. an institution that has the right to deal with electronic money. There is such a thin line between banks, central banks and EMIs that working without a license is prohibited in all countries. Only after obtaining the appropriate license, it is possible to provide financial services and issue electronic money.

EMI are also payment service providers, of which there are quite a few in the financial market. But for ordinary PSP players, emission is not available, they work only with those assets that are available to them. The work of such a company is easier and cheaper in design.

Electronic money

In fact, electronic money is also money that is stored in electronic form on a magnetic medium, presented in the form of a requirement to the issuer. They can be called the electronic equivalent of fiat money.

EMIs that have received authorization to issue such funds are sometimes divided into small EMIs - with emissions of no more than 5 million euros, and authorized EMIs working with large amounts.

What services are licensed

Having received an EMI license, a financial company is entitled to the following actions:

  • emission of electronic money;
  • any types of payment services related to electronic money;
  • provision of loans for carrying out payment services;
  • payment initiation - PIS;
  • content of virtual accounts - AIS;
  • issuing your own debit cards;
  • creation and functioning of electronic wallets.

In many ways, EMI functions coincide with those of electronic payment systems, which have become very popular in the last decade. However, conventional payment systems are deprived of a very important function - the right to issue electronic money.

Where to get a license for the payment system?

There is a single rule - if a company applying for an EMI license has offices in the European Union, authorization is requested in the country of jurisdiction of the head office. At the same time, having received a license in one of the countries, it is quite possible to legally provide services throughout the European Union.

Now EMI can be opened all over the world, but this technology has gained the greatest popularity in Europe. Now, accordingly, European countries are leading both in the number of licenses issued and in the total turnover of electronic money.

The most popular countries for EMI registration are Estonia, Lithuania, Malta, traditionally Great Britain and Cyprus.

How to get a license for a payment system?

Formally, obtaining a license is no different from other authorization procedures. A company applying for EMI will have to go through the following steps:

  • choice of jurisdiction, depending on the nature and location of the main activity and offices;
  • preparation of a package of documents, which will include both personal documents of the founders of the company and corporate documentation;
  • at this stage, each applicant can personally meet with the employees of the competent authority, who will help determine whether the documents have been collected correctly and in full, as well as fill out an application for a license;
  • after verification, the application with the entire assembled package is submitted to the regulator;
  • then there is the process of consideration of documents; if competent persons have questions or clarifications, the applicant responds in the prescribed form and within the prescribed time frame;
  • after all possible clarifications and considerations, the regulator makes a decision and either issues a license or reasonably refuses it.

Usually the whole process takes from two to six months, depending on the country of jurisdiction. Sometimes the processing time is legally limited, as, for example, in Ireland, where the total time for obtaining authorization cannot take more than 90 days.

On what basis is the decision to issue a license made? Each submitted document is really considered. At the same time, special attention is paid to the company's reputation - it must be impeccable. An additional plus will be a solid authorized capital, a good history of the company, permanent qualified management. Even the reputation of managers and owners can affect the outcome of the review of documents.

It can be of great help to apply for the preparation of a package of documents to professionals. This will help avoid minor mistakes and annoying misunderstandings. Thus, the chances of obtaining the coveted license increase significantly.

What to do after obtaining a license?

The financial business, first of all, needs an integrated approach. The work of each company consists of a dozen smaller processes.

In fact, obtaining authorization is only the first step towards fully functioning EMI. Further actions - opening accounts based on the received documents, opening access to various international financial systems, for example, SEPA, SWIFT. In order for the company to work reliably and stably, each transaction must be carried out quickly and clearly, the entire procedure for conducting monetary transactions must be thought out to the smallest detail.

And only after that you can proceed to more pleasant little things - marketing, advertising, promotion in the market, attracting customers. After all, it is easy to attract a client, but you can only keep it with high-quality work and an impeccable reputation.

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