In the dynamic world of fintech, new players are constantly joining the arena, innovating financial services, and enhancing consumer experiences. If your company is venturing into the field of electronic money, acquiring an Electronic Money Institution (EMI) license is crucial. However, knowing when you’ll require an EMI license is equally important.

What is an EMI License?

In simple terms, an EMI license allows companies to issue electronic money—virtual currency that can be stored and transferred digitally and used to execute electronic payments. This includes everything from online wallet services to prepaid cards and other electronic payment systems.

When Do You Need an EMI License ?

Identifying the right time to obtain your EMI license is paramount. Some circumstances need an Electronic Money license:

1. Launching E-Money Services:To provide electronic wallets, prepaid cards, or other electronic payment services, you require an EMI license. The license ensures your activities comply with legal and regulatory standards.
2. Entering the EU Market:The EMI license is valid across the EU, thanks to the passporting rights granted by the EU’s single market system. This means that if you plan to expand your operations into any EU member states, you’ll need this license.
3. Building Trust with Users:An EMI license lends credibility to your enterprise. By demonstrating that you comply with the stringent regulations, you reassure your customers that your operations are safe and reliable.
4. Adding More Services:If your company already operates in the financial sector and you wish to add electronic money services to your portfolio, obtaining an EMI license becomes essential.

Here’s a quick list of activities requiring an EMI license:

• Issuing and redeeming electronic money.
• Offering services for executing payment transactions.
• Issuing payment instruments or acquiring payment transactions.
• Money remittance.
• Providing payment initiation services.
• Providing account information services.

Obtaining an EMI license involves a rigorous process of preparation, application, and waiting for approval. The process typically takes about six months but can be an invaluable investment of time and effort considering the burgeoning digital economy.

The fast-paced evolution of fintech calls for new methods of transacting business, and EMI license provides the perfect platform for this. Understanding when and why you need an EMI license is the first step to fintech success.