What an EMI licence lets you do that a standard business account doesn't

For most companies, a corporate bank account is sufficient for day-to-day financial operations. However, as a business grows – particularly in fintech, SaaS, e-commerce, and digital payments – a standard business account may no longer meet its needs. Companies that want to issue electronic money, open payment accounts for customers, or provide payment services under their own brand typically need to obtain an Electronic Money Institution (EMI) licence. Such a licence does more than expand a company's capabilities – it enables the transition from relying on third-party financial infrastructure to building a regulated payment ecosystem of its own. In this article, we explain how an EMI licence differs from a standard corporate bank account, what opportunities it offers, and when obtaining one becomes a strategic business decision.

What is an EMI licence?

For many entrepreneurs, the term Electronic Money Institution (EMI) is associated with an alternative to a banking licence. However, an EMI licence does not make a company a bank. Instead, it authorizes the company to provide certain payment services and issue electronic money within an established regulatory framework. This is why an EMI licence has become one of the most sought-after licences among modern fintech companies.

Definition and regulatory framework

An EMI licence authorizes a company to issue electronic money and provide a wide range of payment services in accordance with applicable legislation.

In the United Kingdom, Electronic Money Institutions are regulated by the Financial Conduct Authority (FCA) under the Electronic Money Regulations 2011 (EMRs) and the Payment Services Regulations 2017 (PSRs), which implement standards originally derived from the EU's e-money and payment services framework. Following the UK's departure from the EU, UK-authorised EMIs no longer hold automatic passporting rights into the EU/EEA and must obtain separate authorisation to provide services there. In the European Union, Electronic Money Institutions are primarily regulated by the Electronic Money Directive (EMD2) and the Payment Services Directive 2 (PSD2). Compliance with common regulatory standards is supervised by national competent authorities, coordinated by the European Banking Authority (EBA).

Obtaining an EMI licence requires a company to comply with rules relating to:

• Capital adequacy;
• Safeguarding of customer funds;
• AML/CFT compliance;
• Corporate governance;
• Risk management and internal controls.

EMI vs a traditional bank

Despite the broad range of services it may provide, an EMI differs significantly from a credit institution.

Unlike a bank, an Electronic Money Institution cannot accept customer deposits or use client funds for lending or other banking activities. Funds received in exchange for issued electronic money must be safeguarded in accordance with regulatory requirements, providing an additional level of protection for customers.

At the same time, in the area of payment services, an EMI often offers capabilities that go far beyond those available to a company using a standard corporate bank account.

Who typically obtains an EMI licence

In practice, an EMI licence is most commonly obtained by companies that want to provide regulated payment services themselves rather than rely on the infrastructure of third-party financial institutions.

Typical applicants include:

• Fintech companies;
• Payment service providers;
• Digital wallet operators;
• Neobanks;
• B2B payment platforms;
• Companies developing embedded finance solutions.

For these businesses, an EMI licence is more than a regulatory requirement – it is a growth tool that enables them to build their own financial products while reducing reliance on banks and third-party payment providers.

What a standard business account allows – and where its limits begin

For most companies, a standard corporate bank account is sufficient for day-to-day operations. However, its functionality is limited to using banking services rather than providing them to others. This is where the difference between a standard business account and an EMI licence becomes clear.

Typical functions of a business account

A corporate bank account enables a company to carry out the financial transactions necessary for running its business.

Typically, it allows a company to:

• Receive and send payments;
• Hold company funds;
• Make payments to suppliers and business partners;
• Pay employee salaries;
• Conduct international bank transfers.

All of these activities are performed solely for the company's own purposes and do not involve providing regulated payment services to third parties.

Activities that require regulatory authorisation

If a company intends not only to use payment infrastructure but also to provide financial services to its customers, a standard corporate bank account is no longer sufficient.

Regulatory authorisation is generally required if a business plans to:

• Issue electronic money;
• Open customer payment accounts or digital wallets;
• Accept and execute customers' payment transactions;
• Issue payment cards or other payment instruments;
• Provide payment services under its own brand.

This is where the key distinction lies between a user of the financial system and a licensed payment service provider. For companies building their own fintech infrastructure, an EMI licence becomes an essential part of their long-term growth strategy.

What an EMI licence allows you to do

The key advantage of an EMI licence is that it allows a company to act not only as a user of financial infrastructure but also as a provider of regulated payment services. Instead of relying solely on banking services for its own operations, the business gains the ability to develop its own financial products and offer them to customers in compliance with applicable legislation.

Issue electronic money

An EMI licence authorizes a company to issue electronic money in exchange for funds received from customers. This provides the foundation for developing digital wallets and other payment solutions that enable users to store electronic money, transfer it, and use it to pay for goods and services. For many fintech businesses, the ability to issue electronic money is the key distinction between operating under an EMI licence and using a standard corporate bank account.

Offer payment accounts and payment services

A licensed Electronic Money Institution can open payment accounts for customers, accept and execute payment transactions, process domestic and international transfers, and provide other payment services permitted by law. As a result, the company becomes an active participant in the payment ecosystem rather than simply a bank customer using financial services for its own operations.

Build your own payment infrastructure

One of the most significant advantages of an EMI licence is the ability to build a proprietary payment infrastructure under the company's own brand. Instead of relying entirely on third-party banks or payment providers, the business gains much greater control over the customer experience, product development, and the integration of financial services into its own ecosystem. This approach is particularly valuable for fintech companies, e-commerce platforms, and businesses developing embedded finance and white-label payment solutions.

Business advantages beyond payment functionality

Obtaining an EMI licence not only authorizes a company to provide regulated payment services but also creates additional competitive advantages. For many fintech businesses, the licence becomes a tool for scaling operations, reducing dependence on third-party financial institutions, and bringing new products to market more quickly.

Greater control over financial services

When using a standard corporate bank account, a company is entirely dependent on the bank's or payment provider's terms. An EMI licence allows the business to manage key elements of its payment infrastructure, introduce new services more quickly, and tailor them to customer needs. This provides greater flexibility for business growth and improves the overall customer experience.

New revenue opportunities

A licensed Electronic Money Institution can build its business model around payment services rather than using them solely for internal operations. This creates opportunities to launch new products, serve corporate clients, develop white-label solutions, and generate additional revenue from payment processing and related financial services.

Scalability and international expansion

For companies targeting international markets, an EMI licence can significantly simplify future expansion. Depending on the licensing jurisdiction and the applicable legal framework, it may provide access to new markets, strengthen credibility with banks and business partners, and facilitate the development of cross-border payment services. For fast-growing fintech companies, this is often a key advantage when expanding internationally. Note that a UK EMI licence does not, by itself, grant passporting rights into the EU/EEA; businesses targeting the EU market typically need separate authorisation there. 

What an EMI licence does not allow

Despite its broad range of capabilities, an EMI licence does not make a company a bank. Many entrepreneurs mistakenly believe that once licensed as an Electronic Money Institution, a company can provide any type of financial service. In practice, EMI activities are limited by law, and certain services still require a banking licence.

In particular, an EMI cannot:

• Accept deposits or other repayable funds from the public;
• Use customer funds for lending or financing its own operations;
• Carry out traditional banking activities reserved for credit institutions;
• Provide payment services beyond those permitted under applicable legislation.

In addition to these restrictions, a licensed Electronic Money Institution must comply with ongoing regulatory obligations, including:

• Maintaining minimum capital requirements;
• Safeguarding customer funds;
• Complying with AML/CFT requirements;
• Maintaining an effective corporate governance framework;
• Implementing risk management and internal control procedures;
• Ongoing engagement with the supervisory authority.

For this reason, an EMI licence should be viewed not as a simplified banking licence but as a separate regulatory regime designed for companies that issue electronic money and provide payment services.

When should a company consider applying for an EMI licence?

An EMI licence is not suitable for every business. For most companies that use a bank account solely for their own transactions, obtaining such a licence would be unnecessarily complex and costly. However, as a business grows and expands its range of financial services, licensing may become a logical next step.

A company should consider obtaining an EMI licence if it plans to:

• Issue electronic money or digital wallets;
• Provide payment services to customers;
• Build its own payment infrastructure;
• Develop embedded finance or white-label payment solutions;
• Scale its fintech product internationally;
• Reduce reliance on third-party banks and payment providers.

The decision to obtain an EMI licence should be based not only on the company's current needs but also on its long-term business strategy. Although obtaining an EMI licence involves meeting extensive regulatory requirements, for fast-growing fintech companies it often provides the foundation for future expansion and the development of proprietary financial products.

How Key2Law helps businesses obtain an EMI licence

Obtaining an EMI licence is not just about securing regulatory approval – it is about building a business that complies with financial regulations. The success of the project largely depends on choosing the right jurisdiction, preparing high-quality documentation, and ensuring the company is ready to meet ongoing regulatory requirements after the licence is granted. That is why legal and compliance preparation should begin well before the application is submitted.

Key2Law team helps fintech companies and payment providers throughout the licensing process:

• Selecting the most suitable jurisdiction for an EMI licence;
• Designing the corporate structure and business model;
• Preparing licensing documentation;
• Developing an AML/CFT framework and internal policies;
• Supporting communication with the regulator;
• Providing post-licensing support, including ongoing compliance.

If you are planning to launch your own payment service, digital wallet, or another fintech product, the Key2Law team can help you choose the right licensing strategy, prepare your business to meet regulatory requirements, and successfully obtain an EMI licence. Contact us to build a strong foundation for the long-term growth of your financial project.