Developed for the digital era, alternative payment institutions provide innovative access to basic financial services across many sectors. EMIs represent an essential part of the EU’s financial mechanism as they assist natural persons and enterprises in managing their funds. As per the enforceable EU law, all entities dealing with e-funds must acquire an EMI license to guarantee a proper and fully compliant operation.
What is an EMI?
Simply put, EMI is a simplified version of a bank holding an EMI license to issue e-funds. Such type of entities makes operations with finances more flexible, quick, and secure for clients both entities and natural persons. EMIs deliver offerings similar to those in banking institutions. They are eligible to open accounts and as being approved structures they are ruled by the legislation setting minimum capital condition which constitutes 350,000 EUR.
Overview of EMIs in the EU
The EU and the ECB are seeing promising potential in EMIs as these entities gain momentum in the financial markets. Getting an EMI license encompasses an application procedure, also EU countries must guarantee that the entity dealing with e-funds is of excellent reputation.
Currently, there are approximately 500 companies within the EU. With the nowadays discussion on virtual currencies, e-payments have become a mainstream topic within Europe. While there is also the aspect of tax and regulative obligations, it looks like EMIs will be developing at a fast pace in the coming years as enterprises and persons turn to more secure alternative operations that are accessible 24/7 and are delivered without delays.
Initially, EMIs were set up within the European market in 2009 after the EuroParliament adopted Directive 2009/110/EC. Since that time, many companies have been set up within the most developed and reputable financial hubs.
EMI & bank: what are the dissimilarities
EMIs are eligible to deliver both local and trans-border services, making it possible for enterprises to run international-level operations more easily compared to banking institutions. While they have some things in common, EMIs and banks do feature considerable differences in the specter of services that they deliver. Based on e-funds technologies, EMIs make easier such operations as transferrings, remittances, even Forex services and some supportive offerings.
On a structural position, almost all EMIs feature smaller structures than traditional organizations and they feature more tech-savvy approach. Hence, this facilitates the development of some capabilities that traditional banks don’t have.
Bottom line
Having considered the main peculiarities of EMIs, we can come to a conclusion that EMIs are well-established transparent businesses delivering state-of-the-art secure solutions to public. Regardless of being “young” in the financial market, EMIs can deliver more integrated and client-tailored solutions than traditional banking. If you are interested in obtaining more details about EMIs and EMI license, please contact our specialists for consultation.
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