What is an EMI? A plain guide to e-money firms

What an electronic money institution is

An electronic money institution (EMI) is a licensed business that lets you hold, send, and receive money, but it isn’t a bank. EMIs issue e-money: that’s a digital equivalent of cash stored in your wallet or account. If you load funds onto an app or card, you’re usually receiving e-money from the provider. When you want your funds back, the EMI has to redeem your balance at face value, as long as you follow their terms and pay any fees shown in advance. So, an EMI is always a regulated provider, but it handles things differently from traditional banks.

What an EMI can and cannot do

If an organization has an EMI license, it’s allowed to:

Give out e-money when you pay in regular cash or a transfer.
Carry out payments and process things like card charges or online transfers.
Offer closely related options (such as currency conversion), depending on the exact license.

There are some things EMIs can’t do. They aren’t allowed to take regular deposits like a bank. They cannot lend out the money you hold with them. And you won’t earn interest from your e-money balance. Sometimes, a bank still sits in the background for certain features, so the EMI itself may not be handling every part directly. If you want a head-to-head comparison, check bank vs EMI: what is the difference for you?.

How to recognise an EMI on a provider's website

You can spot an EMI by looking at the fine print. Check for phrases like 'authorised electronic money institution', a regulator’s name (such as the FCA), and a reference number, these are usually in the footer or legal terms. The legal entity listed isn’t always the same as the brand shown on the app. Sometimes, the official license holder is a separate company, so always verify the exact legal name in the terms.

Some businesses operate as agents or have only partial permissions. Always check their official register entry to see if the wording matches what’s claimed on their site and what activities they’re licensed for. If you need details on how your funds are protected, have a look at safeguarding client funds.

Frequently asked questions

Is an EMI regulated?

Yes, an authorised EMI is a regulated company. It has to meet rules set by its country’s financial regulator. There are requirements for holding enough capital, keeping customer funds separate (safeguarding), having proper management and controls, and taking steps to prevent money laundering. Banks are more widely regulated and cover different services. Always use the official register to confirm the EMI’s authorization for your particular service.

Can an EMI go bust?

Yes. An EMI can fail financially, just as any other company might. If it does, safeguarded customer funds should be repaid through an insolvency process, but this process isn’t instant and it can be complex. Safeguarding aims to minimize loss, but it isn’t complete protection. Decide carefully how much to keep in any one non-bank account.