UK Electronic Money Institution Licence: FCA EMI Requirements, Capital, Cost and Timeline
FCA EMI authorisation: what counts as e-money, EUR 350,000 capital, 2% own funds, CASS 15 safeguarding, redemption rights, GBP 5,640 fee and timeline.
Written and reviewed by the Regulatory Counsel team. Last reviewed: 28 August 2026.
The short answer
An authorised Electronic Money Institution (EMI) is a firm authorised by the FCA under the Electronic Money Regulations 2011 to issue electronic money, and to provide payment services connected with that issuance. Any business where customers hold a spendable balance, whether in a wallet, a prepaid card programme or a multi-currency account, is almost certainly issuing e-money.
Initial capital is EUR 350,000. Ongoing own funds for the e-money element are calculated as at least 2 per cent of average outstanding electronic money, with the payment services element calculated separately where the firm also provides unrelated payment services. Funds received in exchange for e-money must be safeguarded, and the supplementary safeguarding regime in CASS 15 took effect on 7 May 2026. E-money must be issued at par value without delay on receipt of funds and redeemed at par at any time on request.
The FCA application fee is GBP 5,640 (fee Category 5) for an authorised EMI and GBP 1,130 (Category 3) for a small EMI. A small EMI is limited to average outstanding e-money of EUR 5 million and, where it also provides unrelated payment services, a monthly average of EUR 3 million of payment transactions. Expect a nine to fifteen month project for full EMI authorisation.
Key facts at a glance
| Regulator | Financial Conduct Authority (FCA) |
|---|---|
| Permission type | Authorisation as an electronic money institution under the Electronic Money Regulations 2011 |
| Who needs it | Firms issuing electronic money in the UK, including wallets, prepaid card programmes and multi-currency accounts holding customer balances |
| Local entity required? | Yes. A UK entity with its head office in the UK, carrying on at least part of its e-money business here |
| Local management required? | No fixed headcount, but the FCA expects the business to be effectively directed from the UK with approved individuals holding real authority |
| Initial capital | EUR 350,000 for an authorised EMI. A small EMI must hold initial capital of at least 2 per cent of average outstanding e-money where that figure reaches the prescribed level |
| Ongoing own funds | At least 2 per cent of average outstanding electronic money for the e-money activity, plus the payment services own funds element where applicable |
| FCA application fee | GBP 5,640 authorised EMI (Category 5); GBP 1,130 small EMI (Category 3) |
| Small EMI threshold | Average outstanding electronic money must not exceed EUR 5 million, and unrelated payment transactions must not exceed a EUR 3 million monthly average |
| Determination period | Three months for a complete application, applying the same determination framework as the payment services regime |
| Realistic end-to-end timeline | Nine to fifteen months from instruction for full EMI authorisation |
| Territorial scope | United Kingdom. No EEA passporting |
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What is the UK Electronic Money Institution licence?
The UK Electronic Money Institution (EMI) licence authorises firms to issue electronic money - digital stored value held on behalf of customers and used for payment transactions - and to provide the full range of payment services available to authorised payment institutions. An EMI can do everything an API can do, plus issue e-money.
This enables digital wallets, prepaid cards, multi-currency accounts (the Revolut model), stored value platforms and any product where customers load funds that are held as electronic money. The EMI licence is issued by the Financial Conduct Authority under the Electronic Money Regulations 2011 (EMR 2011).
The distinction between payment services and e-money issuance is fundamental: payment institutions process transactions but do not hold value; electronic money institutions both hold value and process transactions. This dual capability makes the EMI licence the most versatile authorisation in the payments sector, but it also carries the highest regulatory burden - particularly around safeguarding of customer funds.
Who Needs UK Electronic Money Institution licence?
The EMI licence is required by any firm that issues electronic money in the UK or that wishes to offer products involving stored customer value.
- - Digital wallet providers (consumer and business wallets)
- - Prepaid card issuers (Visa/Mastercard programme managers)
- - Multi-currency account providers (Revolut-model businesses)
- - Stored value platforms for gaming, loyalty or marketplace escrow
- - Firms offering customer accounts where value is held as e-money
- - Any business enabling customers to load, store and transact with digital funds
A common misconception is that firms providing "payment accounts" do not need EMI authorisation if they describe the product differently. The FCA looks at the substance of the arrangement, not the label. If customers can load funds into an account, hold those funds and use them to make payments, the product is likely e-money regardless of how the firm markets it.
What counts as electronic money?
Electronic money is electronically stored monetary value, represented by a claim on the issuer, issued on receipt of funds for the purpose of making payment transactions, and accepted by a person other than the issuer.
Three features decide most cases. The value is stored rather than merely in transit, the customer holds a claim against the issuer, and the value can be spent with third parties. A closed-loop balance usable only with the issuer generally falls outside the definition, while a wallet that can pay any merchant does not.
Firms frequently arrive at this analysis late, having designed a product around customer balances while planning to apply as a payment institution. The distinction determines capital, own funds, safeguarding, redemption obligations and the fee category, so it should be settled before any application work begins.
When is EMI authorisation required instead of a payment institution licence?
- - Customers hold a balance with the firm that persists between transactions
- - The firm issues prepaid cards or wallet accounts spendable with third parties
- - The firm offers multi-currency accounts where the customer stores value rather than instructing a same-day transfer
- - The product includes an IBAN or account-style construct funded in advance of payment instructions
- - Value can be redeemed back to the customer on demand, which is a hallmark of e-money rather than payment execution
Initial capital and the own funds methodology
An applicant for authorisation as an electronic money institution must hold initial capital of at least EUR 350,000. The figure is stated in euros in the Electronic Money Regulations 2011 and there is no fixed sterling equivalent in the instrument.
Ongoing own funds for e-money issuance are calculated by reference to average outstanding electronic money, at a rate of at least 2 per cent. Where the institution also provides payment services that are unrelated to the issuance of e-money, the own funds requirement for that activity is calculated separately using the payment services methods, and the institution must hold the aggregate.
Average outstanding e-money is a rolling measure, so own funds move with the float. A firm whose balances grow rapidly must plan capital increases in advance; discovering the shortfall in a quarterly return is a supervisory event, not an accounting adjustment.
Safeguarding and CASS 15 for e-money firms
Funds received in exchange for electronic money that has been issued must be safeguarded. Segregation in a designated account with an authorised credit institution, or an insurance policy or comparable guarantee, are the available methods, and the arrangement must protect customers from the claims of the institution's other creditors.
CASS 15, introduced through PS25/12 and effective from 7 May 2026, sets out the supplementary regime: specific records and accounts obligations, reconciliation discipline, acknowledgement letters and independent assurance over safeguarding arrangements.
For EMIs the operational challenge is that the float is continuous rather than transactional. Reconciliation must therefore be a daily production process with clear ownership, exception handling and escalation, and the application should describe it in those terms.
Redemption rights
On receipt of funds, an electronic money issuer must issue electronic money at par value without delay. At the request of the holder, the issuer must redeem the monetary value of the e-money at par value at any time.
Redemption conditions and any charges must be set out clearly in the contract before the customer is bound, and charges are permitted only in the limited circumstances the regulations allow, such as redemption before termination of the contract or after the contract has ended by a prescribed period.
Product terms that impose expiry, dormancy deductions or blanket redemption fees are a recurring source of conduct risk and should be tested against the redemption provisions at design stage.
Governance, business plan and programme of operations
- - A programme of operations describing e-money issuance, distribution and redemption alongside each payment service, with a full flow of funds
- - A business plan and three-year forecast that demonstrates own funds compliance as average outstanding e-money grows
- - Directors and persons responsible for e-money issuance of good repute with appropriate knowledge and experience, and assessment of persons with qualifying holdings
- - A governance framework with documented responsibilities across compliance, risk, finance, technology and operations
- - Distributor and agent arrangements, including how distributors of e-money are controlled and monitored
AML, operational and security requirements
- - A business-wide risk assessment addressing e-money specific typologies, including anonymous or low-friction onboarding, load and withdrawal patterns and third-party funding
- - Customer due diligence, screening, monitoring and suspicious activity reporting aligned to the product design rather than to a generic template
- - A security policy document and operational and security risk management arrangements, including major incident reporting
- - Strong customer authentication design for card and account access journeys
- - Business continuity, outsourcing governance and technology resilience proportionate to the float and customer numbers
Ongoing compliance after EMI authorisation
- - Own funds monitoring against average outstanding e-money and prompt notification of deterioration
- - Safeguarding records, reconciliations and independent assurance under the current regime
- - Regulatory reporting including e-money and payment services returns and financial crime data
- - Redemption and complaints handling within Financial Ombudsman Service jurisdiction, and Consumer Duty obligations for retail products
- - Notifications for change in control, permission variations, distributor and agent appointments and material outsourcing
EMI vs PI: which authorisation does your model need?
The question is not what the product is called but whether customers hold stored value.
| Decision point | Electronic Money Institution | Payment Institution |
|---|---|---|
| Core activity | Issuing e-money and redeeming it at par | Executing payment transactions |
| Customer balances | Stored value held by customers between transactions | Funds held only to complete a transaction |
| Initial capital | EUR 350,000 | EUR 20,000 to EUR 125,000 by service |
| Own funds | At least 2 per cent of average outstanding e-money, plus the payment services element where relevant | Method A, B or C as directed by the FCA |
| Redemption duty | Issue at par on receipt and redeem at par on request | Not applicable |
| Safeguarding | Funds received for e-money issued must be safeguarded, subject to CASS 15 | Relevant funds safeguarded under regulation 23, subject to CASS 15 |
| FCA application fee | GBP 5,640 | GBP 2,820 or GBP 5,640 |
| Lighter route | Small EMI, capped at EUR 5 million average outstanding e-money | Small Payment Institution, capped at EUR 3 million monthly average |
Key Requirements
Initial Capital
£350,000 initial capital for Authorised EMI (AEMI) - significantly higher than the API requirement due to the e-money issuance permission. Capital must be fully paid up at the time of application submission. Ongoing own funds must be maintained at the higher of the initial capital floor (£350,000) or 2% of average outstanding e-money.
Governance & Fit and Proper
Full management body fitness and propriety assessment. At least two directors with collective competence in e-money, payments, compliance and risk. MLRO appointed as SMF17. A credible wind-down plan is required demonstrating how e-money holders would be repaid in full in the event of orderly failure.
AML & Financial Crime Controls
Same obligations as authorised payment institutions - MLRs 2017 in full. Additionally, JMLSG sector guidance on e-money products applies, including specific obligations around anonymity limits on e-money instruments, enhanced due diligence for high-value e-money products and monitoring of e-money redemption patterns for suspicious activity.
Safeguarding
PS25/12 applies with additional complexity for EMIs because outstanding e-money (float) must be safeguarded at all times. This requires: CASS 15-compliant safeguarding records and accounts, calculation and reconciliation of the safeguarding requirement on each reconciliation day, segregated account at an FCA-approved credit institution with written acknowledgement, monthly reporting return and annual independent audit. Safeguarding is more complex for EMIs than PIs because the float fluctuates continuously.
Operational Requirements
Comprehensive IT systems, business continuity arrangements, outsourcing governance and operational resilience frameworks. EMIs handling card programmes must also comply with card scheme operational requirements.
Small EMI Threshold
Small EMI (SEMI) registration is available for firms with average outstanding e-money below €5 million and average monthly payment transactions below €3 million. SEMI registration involves no minimum capital requirement but carries identical AML and safeguarding obligations.
What does EMI authorisation cost?
- - Regulator fees: GBP 5,640 for an authorised EMI application (Category 5) or GBP 1,130 for a small EMI (Category 3), payable on submission and non-refundable. Annual periodic fees follow authorisation
- - Capital: EUR 350,000 initial capital for an authorised EMI, held and evidenced, then own funds of at least 2 per cent of average outstanding e-money on a continuing basis
- - Third-party costs: safeguarding account onboarding, card issuing and processing arrangements, monitoring and screening tooling, security testing, forecast and audit support, and independent assurance over safeguarding
- - Professional fees: quoted as a fixed fee per engagement following scoping. EMI applications vary widely depending on distribution model, card programmes, group structure and whether payment services unrelated to e-money are included
- - Running costs: the float drives daily reconciliation, capital monitoring and reporting, so ongoing compliance cost is structurally higher than for a payment institution of similar revenue
The Application Process
Permission Scoping and Capital Planning
Regulatory Counsel confirms e-money issuance as the primary regulated activity, maps all additional payment service permissions required and plans the capital structure. The £350,000 initial capital must be fully paid up at submission - we advise on funding structure and timing. Timeline: 2 weeks.
Corporate Structure and Governance Build
We appoint the management body with fit and proper credentials, MLRO as SMF17 and wind-down planner. All Individual Questionnaires are prepared. The management body must demonstrate collective competence in e-money, compliance and risk management. Timeline: 4–6 weeks.
Safeguarding Bank Engagement
We identify and approach FCA-approved credit institutions for a segregated safeguarding account. This is the most commonly underestimated step - banks are cautious about onboarding EMIs and the process can take 8–12 weeks. Written acknowledgement must be obtained before submission. Timeline: 4–8 weeks (in parallel).
AML Programme, Safeguarding Methodology and Wind-Down Plan
We build the EMR-compliant AML programme, daily safeguarding calculation methodology per PS25/12 and a credible wind-down plan covering e-money holder repayment. The wind-down plan must demonstrate a clear methodology for repaying all e-money holders within a defined timeframe. Timeline: 4–6 weeks.
Regulatory Business Plan and Financial Projections
Financial projections must be internally consistent - e-money float forecasts, revenue model, capital adequacy calculations and customer acquisition assumptions must all align. The FCA scrutinises EMI business plans more closely than PI applications due to the higher risk to consumers. Timeline: 3–4 weeks.
FCA Connect Submission and Assessment
Regulatory Counsel submits the completed application and manages all FCA correspondence, information requests and assessment meetings. EMI applications typically take 6–18 months for assessment due to their complexity. Timeline: 6–18 months.
Total expected timeline: 8–20 months from instruction to authorisation.
How long does FCA EMI authorisation take?
Statutory position. A complete application is subject to a three-month determination period, with an outer limit where the application is incomplete, applying the same determination framework used for payment institution applications.
Practical position. EMI applications are among the most heavily scrutinised the FCA handles, because the firm holds a continuing float. Preparation typically takes four to five months once the product design is settled, and assessment commonly runs six to twelve months.
Nine to fifteen months from instruction to authorisation is a realistic plan. The most common causes of extension are unresolved e-money perimeter questions, safeguarding arrangements that cannot be evidenced operationally, and forecasts that do not demonstrate own funds compliance as the float grows.
Why Applications Fail - and How We Prevent It
Inadequate Safeguarding Methodology
EMIs must demonstrate specifically how they will calculate and safeguard the daily safeguarding requirement - the amount of outstanding e-money that must be segregated at all times. Generic safeguarding policies without a clear methodology for daily calculation, reconciliation and reporting are rejected by the FCA.
Business Plan Disconnect
E-money float projections that are not consistent with the revenue model or customer acquisition plan trigger immediate FCA challenge. If the business plan projects 100,000 customers but the marketing budget implies 10,000, the FCA will identify the inconsistency. Internal consistency is rigorously checked for EMI applications.
Banking Partner Not Confirmed
EMI applications submitted without a credible pathway to a safeguarding bank account are routinely declined. Banks are increasingly reluctant to onboard EMIs, and this relationship must be established - with written acknowledgement obtained - before submission. This is the single most underestimated step.
Underestimating Wind-Down Planning
The FCA expects a detailed, credible wind-down plan for EMIs given the direct risk to e-money holders. The plan must demonstrate how all e-money holders would be repaid in an orderly manner within a defined timeframe. Generic templates are rejected - the FCA expects a wind-down plan that reflects the specific product architecture and customer base.
Practitioner observations on EMI applications
- - Perimeter decided too late. Firms design a balance-holding product, then try to fit it into a payment institution application. Resolving the e-money question first avoids rebuilding the application
- - Float economics ignored in capital planning. Own funds scale with average outstanding e-money, so growth without a capital plan creates a breach rather than a milestone
- - Safeguarding described as a bank account. The FCA expects a reconciliation process with named owners, frequency, break management and assurance
- - Redemption terms drafted by product rather than compliance. Expiry, dormancy and fee provisions are tested against the redemption rules and frequently fail
- - Distributor networks under-controlled. Where e-money is distributed through third parties, the FCA looks for monitoring, training and contractual control, not just an agreement
- - AML frameworks copied from payment firms. E-money typologies differ, particularly around loads, withdrawals, third-party funding and low-friction onboarding
How Regulatory Counsel Can Help
End-to-End Application Management
We manage every aspect of the EMI application - from capital planning and safeguarding bank engagement through to FCA submission and assessment management.
Regulatory Business Plan
We draft an internally consistent regulatory business plan with aligned e-money float projections, revenue model, capital adequacy and customer acquisition strategy.
Ongoing Compliance Support
Post-authorisation compliance support including daily safeguarding oversight, RMAR reporting, wind-down plan maintenance and PS25/12 annual audit coordination.
Regulatory Counsel works on electronic money authorisations across the UK and EU. We understand the specific challenges of EMI applications - particularly safeguarding bank engagement and wind-down planning - and our structured approach is designed to address these challenges before they become blockers.
Related Licences
UK Small Electronic Money Institution
Registration route capped at EUR 5 million average outstanding e-money.
UK Authorised Payment Institution
The correct permission where the model executes payments without issuing stored value.
UK Small Payment Institution
Lighter payments registration for firms below the EUR 3 million monthly threshold.
Frequently Asked Questions
If customers hold a balance with you that persists between transactions and can be spent with third parties, you are issuing electronic money and need EMI authorisation. If you only execute transactions and hold funds transiently to complete them, a payment institution permission is normally the correct route.
Initial capital of EUR 350,000 for an authorised EMI. On an ongoing basis, own funds for the e-money activity must be at least 2 per cent of average outstanding electronic money, with a separate calculation added for payment services that are unrelated to e-money issuance.
GBP 5,640 for an authorised EMI application under fee Category 5, and GBP 1,130 for a small EMI under Category 3. The fee is payable on submission and is not refunded if the application is withdrawn or refused.
A complete application carries a three-month determination period, but EMI applications attract detailed scrutiny and information requests. Allow four to five months of preparation and six to twelve months of assessment, so nine to fifteen months in total.
A small EMI is a registered rather than authorised e-money firm. Average outstanding electronic money must not exceed EUR 5 million, and where the firm also provides payment services unrelated to e-money those transactions must not exceed a monthly average of EUR 3 million. Small EMIs cannot rely on the regime once those limits are passed.
Applications are made by a UK entity with its head office in the UK. Overseas ownership is permitted, but qualifying shareholders are assessed, beneficial ownership must be traceable to natural persons, and the FCA expects the e-money business to be effectively directed from the UK.
Funds received in exchange for e-money must be safeguarded by segregation in a designated account with an authorised credit institution, or by insurance or comparable guarantee. CASS 15, effective 7 May 2026, adds records, reconciliation and assurance requirements that apply to the float on a continuing basis.
Only in the limited circumstances allowed by the Electronic Money Regulations, and only where the charge is clearly stated in the contract before the customer is bound. E-money must otherwise be redeemed at par value at any time on request, and expiry or dormancy deductions are a common source of regulatory challenge.
No. Issuing electronic money in the UK without authorisation or registration is prohibited. Some firms launch through a programme manager arrangement with an authorised EMI while their own application progresses, which must be structured and disclosed properly.
No. UK to EEA passporting ended with the transition period. Serving EEA customers requires an authorised entity in an EEA member state, and the capital, safeguarding and governance requirements there must be met separately.
Primary sources
The requirements, fees and timeframes on this page are taken from the following primary regulatory and legislative sources. Rules change, and firms should confirm the current position before relying on any figure.
- Electronic Money Regulations 2011, regulation 19 (capital requirements)
- Electronic Money Regulations 2011, Schedule 2 (capital requirements)
- Electronic Money Regulations 2011, regulation 13 (small electronic money institution conditions)
- Electronic Money Regulations 2011, regulation 20 (safeguarding)
- Electronic Money Regulations 2011, regulation 39 (issuance and redeemability)
- FCA: application fees for payment services and e-money firms
- FCA Handbook, CASS 15: payment services and electronic money, relevant funds
Last reviewed by the Regulatory Counsel team on 28 August 2026.