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The most widely applied licenses for the UK firms engaged in the FinTech sector are the two non-banking PSP authorizations: PI License and EMI license. They both give authorizations to engage in the delivery of the main monetary services that allow servicing a wide range of businesses. Thus, businesspersons may hesitate between the EMI and the PI license, being unsure which one corresponds better to the scope of the company they wish to set up. Indeed, both types are quite similar in some respect, however, there are also many different aspects between them. We will try to clarify the similarities and the dissimilarities so that you could make a more precise decision on which authorization a specific business requires.
Both EMIs and PIs in the UK are under the remit of the same law – PSD2. The main similarity between these FinTech organizations is that both PIs and EMIs can deliver services in the respect of payments to their clients. Licensing conditions are, in general, similar to the shareholding, personnel, or accounting and external audit obligations, for instance. However, the main dissimilarity is that EMIs have the authorizations to issue e-funds additionally to their authorization to operate as PIs and deliver payment solutions.
Taking into consideration the PI and EMI license obligations imposed by the authorities, several other differences can be found as described below:
Fees for licensing as an approved organization or incorporation as an EMI or PI depend on the rules established by the regulatory agency.
For instance, if you are considering obtaining a small EMI or PI license, applying to FCA, the regulative body for approximately 50,000 financial organizations in the UK – there is a fee for application in the amount of £500 while for licensing for an authorized organization the fee payable is £5000.
In the UK, a primary regulative organization for the domain of finances was the Financial Service Authority. However, over time, it split up into the following organizations:
They have the following roles:
Companies providing their activities in the FinTech domain, as a rule, fall under the remit of the FCA.
These are the core dissimilarities between EMIs and PIs. If you need any further details or a consultation, you can contact our lawyers at Eternity Law International. Also, you may check EMI and PI licenses for sale.
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