All about EMI – Electronic Money Institution licensed companies

/All about EMI – Electronic Money Institution licensed companies

Recently EMIs (Electronic Money Institutions) have become an increasingly popular alternative to conventional banking.

In this post we will take a look at why EMIs are a viable alternative to traditional banks and corporate bank accounts

GBO can assist you to find the best EMI corporate account for you

Are you looking to obtain an EMI (Electronic Money Institutions) License for your company? Contact us and we will try to assist you

EMI Accounts vs. Conventional Banking

If you are looking for an alternative to your traditional bank account we can help you find the solution which best meets your banking needs.

EMIs can issue electronic money; supply payment services; in some cases grant loans linked to payment services; offer operational services and additional services like management of your payment system or commercial activity.

What is a Payment Institution?

A Payment Institute (often called financial institution) is a type of payment service provider which was created as a result of the enactment in 2009 of the EU Payment Service Directive (PSD). The Directive set out regulations for all payment service providers that would allow businesses and individuals to make safe, cost efficient, timely payments easily. By removing the legal barriers to the provision of EU payment services the Directive opened the market up to newcomers in the EU payments market including payment institutions.

The Directive aimed to:

  • Create a single payment market in the EU
  • Establish a regulatory framework for an EU single payment market
  • Level the playing field and encourage competition
  • Assure consistent client protection and improved transparency
  • Set the groundwork for more efficient payment systems in the EU

Contact us for additional information regarding EMI

Why are EMIs such a Break Through?

The e-wallet and transfer services provided by EMI license holders are similar to those of traditional banks but differ in significant ways:

Innovation – The overall customer experience in small Fintech companies is superior to that of traditional banks. At small Fintech companies customers benefit from state-of-the-art core banking systems and enhanced UX and UI.

Advanced AML and Risk Procedures – EMIs’ modern banking methods and advanced internal systems have the capacity to monitor online activities for any suspicious transactions. This sophisticated ability is rare (or non-existent) in traditional banking and their internal systems.

Is EMI the future of banking as we know it?

With EMI Fintech companies booming at the moment and the rapidly expanding market there are many EMI start-ups to choose from. However each EMI uses a different business model, specific technology and operates on a particular scale. EMIs range from sophisticated e-wallet systems accessed through a mobile app to simple EMIs offering basic transfer and remittance services. With the wide range of EMIs available any company or individual can find an EMI to meet his banking needs and replace his traditional banking.

What to Expect from Corporate Banking in the Future – EMI

With the European banking world going through a period of change we are seeing the emergence of new competition in the market like non-banking finance businesses, Fintech companies, financial institutions, start-ups and existing large technology businesses entering the financial industry all offering alternative finance solutions to bank customers. These new alternatives are drawing customers away from traditional banks with options that most conventional banks don’t offer or are not able to offer to the same standard with their old systems. This presents a challenge to conventional European banks.

Current Challenges Facing Traditional European Banks

Traditional banks need to compete with the new contenders in the market by making heavy investments in technology, integrating their systems and going digital so that they can offer customers end-to-end solutions. If traditional banks succeed in making these changes they will be able to implement technical standards for harmonized reporting and conduct efficient liquidity management. Moving into the future banks have to step up their investment in security; once traditional banks are operating on mobile devices and applications they will face a new set of security challenges which must be met.

Changing the Traditional Banking Model with EMI

EMI may not be a new framework in the financial world but we have seen a dramatic increase in the number of EMI Fintech businesses and their profits in recent years.
EMI offers an alternative legal framework for the traditional banking model both in the business world and for personal accounts. Wherever you go these days you hear about businesses moving from traditional banking and opening an EMI account, this is particularly prevalent among companies which deal internationally.
Where are EMI Licenses Issued?
You will find several European countries taking an active role in helping start-up companies obtain an EMI license. Some of the leading countries in this area are Lithuania, Malta, the Czech Republic and Luxembourg.

If you would like further information feel free to contact us.
Why are Start-Ups and International Companies Choosing an EMI Account over Conventional Banking?
There are many reasons why some companies and start-ups prefer to go with an EMI account and in many ways the pros outnumber the cons when compared to traditional banking:

  • Additional Banking Services – The latest technology offers integration of additional banking options – EMI companies can have flexible core banking systems allowing them to include many more services with just a click on the keyboard; something traditional banks cannot offer (for example AML, KYC and alternative payment methods). The antiquated systems used by old traditional banks cannot cope with new technology and so cannot offer the latest automated services.
  • Convenience – With EMI your transactions can be made at any time, from any place, all you need is internet access.
  • Simplicity – Web designers strive to make their sites accessible to even the most inexperienced user. The EMI services are generally user-friendly and have interface features which are intuitive requiring no technical knowledge. If for any reason the user does not manage to make his transaction smoothly there is always a support team on hand to handle inquiries 24/7 through live chat, forums, email or FAQs.
  • Time Efficient – It is much faster to make a money transfer between virtual accounts than it is to send a wire transfer or a traditional postal transfer which can take up to several days. There is also the time saved by not having to physically get up, go to the bank or post office to make the transaction and wait in endless lines.

Basic Considerations when deciding whether to use EMI:
1. Do EMIs offer customers IBAN? Yes you can get an IBAN with some EMI.
2. What can I do with an EMI account? You can conduct the exact same transactions as you would have done with your conventional bank account – currency exchange, send funds, receive funds, issue debit cards, SEPA transfers etc.

According to EU authorities EMI is most definitely the future of banking as we know it.

The Central banks of Malta, Cyprus, Gibraltar, Lithuania and other jurisdictions are encouraging business people to set up new Fintech companies and begin the long EMI license application process (more about the EMI license application process in part two of this post).

In the following chart you can see the total number of EU e-money and payment institutions for the years 2001 to 2014. The information was supplied by the European Central Bank.


In an effort to boost economic profits; encourage competitiveness and promote the continued adaptation as we move into the digital age the EU has instituted a number of e-commerce innovations.