For fintechs that want to issue electronic money, provide payment accounts, or offer IBAN-based services across Europe, the Electronic Money Institution licence is the gateway.
For fintechs that want to issue electronic money, provide payment accounts, or offer IBAN-based services across Europe, the Electronic Money Institution licence is the gateway. It is also one of the most compliance-intensive licensing pathways in financial services.
The EMI licence, authorised under EMD2 (Directive 2009/110/EC) and governed alongside PSD2, allows a non-bank entity to issue e-money, safeguard client funds, provide payment accounts with IBANs, and execute payment transactions. The minimum initial capital requirement is €350,000 — a figure that has remained consistent across the EU. Once authorised in one member state, the EMI can exercise passporting rights across all 30 EU/EEA member states through regulatory notification, without needing a separate licence in each jurisdiction.
The AML/CFT obligations are substantial. EMIs must implement policies and procedures appropriate to their risk profile, conduct customer due diligence, perform continuous transaction monitoring, apply enhanced due diligence in high-risk scenarios, and train all relevant employees on AML/CFT requirements. They are subject to the full weight of EU Anti-Money Laundering Directives (AMLD1 through AMLD6) — a framework designed to prevent money laundering and terrorism financing across the financial services sector.
The incoming PSD3 represents the most significant structural change in a decade. The provisional agreement reached in November 2025, with expected publication in Q2 2026, merges the EMI licensing framework into the Payment Services Directive structure. Under PSD3, EMIs become a sub-category of Payment Institutions — a reclassification that simplifies the regulatory architecture but requires existing EMI licence holders to transition to the new framework within a 24-month grandfathering period.
For businesses currently holding or applying for an EMI licence, the PSD3 transition planning is urgent. The 24-month window means that compliance teams must understand the new requirements, assess the operational impact, and prepare for relicensing — all while maintaining compliance with the existing framework. The operational cost of running parallel compliance programmes during the transition period is not trivial.
Jurisdictional variation adds complexity. While capital requirements and AML obligations are consistent across the EU, national regulators retain discretion on additional governance, risk management, and operational requirements. The licensing process itself varies by member state — some regulators are faster and more accessible than others. The UK, post-Brexit, operates its own separate PSD2/FCA regulatory regime with similar but distinct EMI requirements.
For businesses considering where to establish their EMI, the jurisdictional choice is a strategic compliance decision, not just a commercial one. Regulatory approach, processing times, supervisory culture, and post-licensing expectations all factor into the decision.
At Kybri Consulting Limited, we advise fintech businesses on EMI licensing strategy — from jurisdictional assessment and application preparation through to AML/CFT framework design, PSD3 transition planning, and ongoing compliance.
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