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How to get an EMI license in Europe

How to get an EMI license in Europe

If you want to be a payment service provider, such as issuing debit cards, providing money transfer services and e-wallets, you need a license for e-money transactions. To obtain an EMI license in Europe, you need to contact a European regulator such as the UK Financial Conduct Authority. Below is information on how to obtain an EMI license in European countries.

European Directive PSD2 (Payment Service Directive 2)

PSD2 is an EU directive (Directive 2015/2366) that sets requirements for organizations providing payment services. It applies to banks, payment processors, e-money institutions and their customers. PSD2 is the document that established the requirements for companies wishing to obtain an EMI license.

Its main goals are consumer protection and making payments safely and securely. The secondary goal of Directive 2015/2366 is to create a more competitive payment landscape. Our experts know all the nuances of PSD2 and the process of obtaining an Electronic Money Institution license, you can contact us to get quality advice.

What payment services can be carried out with an EMI license in European countries

Financial operators can provide a wide range of services, but most of them require different licensing. The license for electronic money is universal, it provides the ability to provide 5 financial services. Below are the services that you can provide with an EMI license.

  1. Payment accounts. Examples of billing accounts are debit and credit cards. The user can deposit and withdraw cash from such accounts, as well as use the card to make payment transactions.
  2. Merchants. Electronic Money Institution license holders can provide merchant services, for example, accept transactions through debit and payment cards.
  3. Money transfers. Money transfers are the second most popular service offered by payment institutions with EMI. A payment service provider may provide users with the ability to make cross-border payments.
  4. Payment initiation services. With the user's consent, the payment processor can initiate payments from the user's bank account and transfer money to the bank accounts of merchants, excluding intermediaries such as Visa and Mastercard from the payment process.
  5. Services for the provision of information about accounts. Under this permission, the payment service provider can grant access to the user's accounts and enable them to view consolidated account information in one place.

How to prepare an application for an EMI license

To obtain a license for e-money transactions, you need to demonstrate that you have high quality software, a strong technology base, clear requirements for shareholders and measures to manage operational risks. By the way, you will also need a physical office in the country you are applying to. An electronic money license cannot be obtained by an organization without an office in a European country.

How to get an EMI license in Europe

You also need to have a large amount of initial authorized capital - € 350. You must have sufficient funds to manage and run your business. You also need to demonstrate that you have experienced leadership and staff to run the business. In addition to the above nuances, much attention is paid to internal controls to ensure the security of payments and prevent fraud.

Your firm's financial statements should adequately reflect the direction of your business, calculations of initial and current capital requirements, and provide financial projections for the first three years. How long does it take to obtain an EMI license? European regulators such as BaFin and FCA must make a decision within three months of receiving the application. In practice, obtaining a license takes about 4-5 months.

Geography of provision of financial services in Europe

If you are a regulated financial services company within an EEA country, you can provide your regulated services throughout the rest of the European Economic Area without the need for additional licensing in those countries.

Countries of the European Economic Area - Austria, Belgium, Bulgaria, Hungary, Germany, Greece, Denmark, Ireland, Iceland, Spain, Italy, Cyprus (Republic of), Latvia, Lithuania, Liechtenstein, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Finland, France, Croatia, Czech Republic, Sweden and Estonia.

Accordingly, if your company is regulated in Lithuania, Romania, Poland, Norway, etc., you can provide regulated services within the above countries without the need for licensing in those countries. To do this, you will need to apply for a passport. The process is simple and fast, our specialists can help you get a passport.

Electronic money license: what documents are needed to obtain an EMI in the UK

An EMI license requires a company to meet certain conditions. The licensing process can be easy or difficult. All companies face different challenges in obtaining an EMI. Our experts can simplify your licensing process. On your application for the Electronic Money Institution, you will be required to provide the following information:

  • company identification
  • business plan and financial projections
  • a description of the organizational structure of your company
  • confirmation of your initial capital
  • measures to protect your users' funds
  • user agreements
  • a procedure for monitoring, handling and following up on security incidents and customer complaints
  • the process of registering, monitoring, tracking and restricting access to sensitive payment data
  • business continuity measures
  • principles of collecting statistics
  • safety regulations
  • internal controls to combat money laundering and terrorist financing (AML / CFT)
  • information about qualified holding companies (shareholders)
  • details of any outsourcing arrangements

Our experts know how to get EMI in European countries. An EMI license is issued by a specific regulator in each country. Each regulator has its own characteristics when submitting an application. We have extensive experience in obtaining various licenses for financial institutions, you can contact our specialists for advice.

Features of obtaining an EMI license

The management of each company that applies for licensing is thoroughly checked by regulators in all European countries, regardless of which country you applied to. By the way, if the management does not contain 2 authorized persons living in the EU (they must be residents of one of the countries of the European Union), the company will not receive a license. Although, this point varies from country to country. There are countries where 1 authorized person who has the citizenship of one of the countries of the European Union is enough for licensing, another member of the management may be a resident of the CIS.

The company's management must have a financial or economic higher education, if the education is technical, the company will be refused licensing. The management must provide certificates and documents confirming their higher education.

There is also a simplified licensing version for financial operators - a small EMI license. Regulators provide fewer requirements for obtaining it, but it is not valid in all countries of the European Union. Therefore, if you plan to provide your services throughout the European Union, we recommend that you apply for a standard EMI license. Our experts can tell you the advantages and disadvantages of a small EMI license, as well as why an EMI license will be more beneficial for your company.

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