Ways of Opening E-money Organization in UK and Getting EMI Permission

Today, it is not at all necessary to open your own establishment to start offering banking services: rapid development of financial technologies has pushed European countries to new types of licenses. However, despite the active digitalization of the financial sector, one can still encounter misunderstanding, and sometimes distrust of e-money establishments or, as the people call it, electronic wallets. Business representatives and end consumers prefer classic banks, recklessly believing that payment services are less reliable. Although the presence of an EMI license in Europe is already a security guarantor.

The high popularity of electronic payments has led to an uncontrolled, even chaotic, growth of players in this market. Quite recently, there were several hundred electronic payment systems in the world, many of which did not comply with the (moreover, vague) rules of the game in this market. A large number of financial frauds, unsuccessful projects and much more have led to some stagnation of the electronic payments market and the disappearance of many players from it. Please visit this website to find out more about EMI licence for sale.

Note that the UK accounts for almost half of all European EMIs, as it is the most progressive jurisdiction that has issued the most licenses within a single calendar year: a whopping 143.

What is a goal of mandatory getting of a permit for e-money circulation?

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Issuer is obliged ensuring introduction of organizational, procedural measures in digital money system and the use of technical means in order to identify, as well as prevent, prevent and combat fraud. At the same time, the issuer has the right to independently ensure the functioning of the electronic money system or conclude agreements with resident operators on the performance of operational or other technological functions in e-money systems. If an entrepreneur has permission to overcome e-money guarantees his/her compliance with all of the above criteria.

An organization with an EMI authorization gets the same rights as a payment institution, and much more. Organizations with EMI clearance can hold customer assets and produce payment cards, e-wallets, and other instruments to hold clients funds. With their help, it is beneficial for customers to make transactions, in particular, to buy goods and services.

Despite the lengthy procedure, the result is justified, despite any problems, since organizations that have received EMI approval will be able to adequately offer their clients various financial administrations (in addition to lending) and services for storing client funds. In addition, when in doubt, all of these services are provided on the Internet and people all over the world value their use. EMI makes transactions as easy as one would reasonably expect, and this is an important explanation for their general prevalence.

What good and reliable UK offers regarding EMI licenses and sector regulation in general?

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Legislation and regulation in the UK is much simpler as the government tries to create most auspicious environment for any commercial venture to develop. EMI companies are subject to the pan-European payment directives E-money, PSD/PSD2, the laws of the Kingdom itself and FCA – the representative office of the local regulator.

An important detail for customers – if banks are required to exchange tax data according to standards of the Organization for Economic Cooperation and Development, then EMI firms in Britain do not have such an obligation. Since EMI regulation is simpler, it is also more flexible in dealing with clients. By the way, many banks have their own EMIs as an alternative to their banking services.

Customer funds are always in place. To work on an EMI permit in the UK, you need to open a special bank account where clients’ funds will be held. This money is inviolable, that is, it cannot be spent on the provision of other services or on the needs of the company. At the same time, classic banks, on the contrary, use funds received from clients, for example, to issue loans or overdrafts. The question may arise – on what, then, do e-money establishments earn? Answer is simple: on commissions, which are separate from client funds.

With the development of digital EMI technologies, firms are becoming strong competitors to traditional financial establishments. A convenient service of global transfers with ability to open an account remotely, flexibility of legislation and a minimum of associated costs, reports and risks allows them to boldly go into the technological future.

What should an entrepreneur be prepared for and what requirements should he/she meet?

Source: lb.lt

The main requirements for the beneficiary or the owner of the company are a good reputation and confirmation of the source of funds. In addition to complying with these requirements, you need to pay attention to certain nuances with the documents. The UK often asks for organizational policies and business practices. It is impossible to write multi-page policies or procedures on your own – consulting companies that prepare all the documents will help you here. I would like to point out right away that Fintech lawyers and Fintech consultants are not the same thing. Fintech consultants prepare all the documents and participate in all communication with the regulator, while lawyers prepare general documents, and the rest are requested from you.
To apply for an EMI in the UK, companies are subject to give the following:

  • plan for commercial activities;
  • payment services it can provide to customers;
  • its internal management mechanisms;
  • a description of how the company is going to protect capital of e-money holders;
  • availability of start-up capital;
  • a list of all directors, managers and agents for the next verification of these persons.

Today, the high demand for advanced technologies in financial sector leads to the emergence of new solutions and strong competition formation for traditional institutions.

Bogdan Radicanin
Bogdan Radicanin

My name is Bogdan Radicanin, but everyone calls me Boba. I also work as a full-time musician. I approach both jobs with a lot of passion, and I believe that's what makes me successful.