Perhaps, you’re on the verge of starting your own fintech business in Great Britain. If so, you’re bound to stumble on such a thing as an Electronic Money Institution license. The permission of this kind is traditionally issued by the Financial Conduct Authority, also dubbed FCA for short. The given license lets firms release electronic money and also offer payment services across the United Kingdom. To work within the European Economic Area, a separate license in an EU/EEA member state is required. With the help of this license, you’ll gain the trust of your clients, who naturally need ultimate security as well as compliance when having to do with financial services.
The licensing process is not easy, but you can cope with it with the right approach. Let us navigate you through the procedure. However, you can always choose an easier path and take advantage of an authorized Electronic Money Institution in the UK for sale.
Understand the very essence of the EMI license
An EMI license isn’t just a formality. It allows you to issue e-money, offer wallets, process payments. What’s more, you’re even authorized to operate prepaid cards. Unlike a small payment institution license that has to put up with decreased limits, the EMI license offers greater freedom and access to a larger customer base.
To put that another way, to become a serious player in the highly competitive niche of digital finance, you can’t do without this license.
Meet the major criteria
The FCA wants to ensure that only trustworthy firms get licensed. To qualify for that, your firm should:
- Be UK-registered with a real physical presence.
- Have at least €350,000 of initial capital.
- Show a business plan, which explains how you’re going to operate, grow, and also manage risks.
- Have skilled and experienced directors.
- Employ appropriate procedures, covering AML, customer due diligence, as well as risk controls.
If you fail to prove that your firm is trustworthy, the license won’t be approved.
Prepare your documentation
That’s where the vast majority of applicants stumble. The application package is quite big, and missing some details will bring long delays. The required docs include:
- A detailed business plan with financial forecasts.
- Compliance policies, including AML, risk management, and fraud prevention.
- Internal governance documents demonstrating how your firm is structured.
- Resumes and background checks for directors as well as key managers.
- Information about your IT systems and data security.
The FCA puts much value on IT security and AML procedures. The watchdog wants your systems to be safe and also capable of scaling as your firm grows.
Have your request uploaded to the FCA
Once your documentation is ready, you require filing the application via the FCA’s online system. Additionally, you need to pay an application fee that depends on the complexity of your business.
Don’t expect an instant turnaround. As a rule, the watchdog reviews applications for up to six months or more. Much depends on the quality of your application and also how quickly you answer extra questions.
Ongoing compliance following approval
Getting licensed is not the end. Once approved, you require:
- Filing regular reports with the FCA.
- Maintaining the minimum capital on a regular basis.
- Keeping compliance procedures updated.
- Tracking risks and reporting malicious activities.
- Undergoing audits when necessary.
Inability to comply can generate penalties or even license withdrawal. Therefore, ongoing compliance is just as crucial as the initial approval.
Why it all makes sense
Yeah, the process is daunting, but having this license in Great Britain brings great advantages. It gives green light to offering e-wallets, prepaid cards, international transfers, not to mention innovative fintech solutions. Besides this, it shows clients, partners, as well as investors that your firm is trustworthy and well-regulated.
In a market where trust rules, that stamp of approval from the FCA will be 100% decisive.
What do you need for EMI license in the UK?
You require a UK-registered firm, initial capital of at least €350,000, a clear business plan, to say nothing of directors with substantial experience. Moreover, the FCA expects strong compliance systems, in particular, anti-money laundering controls, customer verification, as well as risk handling policies.
How to set up an electronic money institution?
First, you require incorporating a firm in Great Britain with a real office presence. Secondly, prepare a business plan, secure funding, hire skilled and experienced directors, and also build the necessary IT as well as compliance systems. Once ready, submit your application to the watchdog with all required documents and wait for approval.
How much is the EMI license in the UK?
The watchdog charges an application fee, normally ranging from £5,000 to £25,000, based on the size and complexity of the business model. Nevertheless, the real cost often exceeds the application fee. Don’t forget about compliance staff, IT systems, and also ongoing reporting expenses.
How much does it cost to get a banking license in the UK?
A full banking license is more demanding and more expensive than an EMI one. Both the FCA and Prudential Regulation Authority insist on a starting amount of at least £1 million, in addition to huge setup costs, strict governance rules. Get ready for long review timelines. For the vast majority of fintech startups, pursuing an EMI license is a more practical first step.