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E-Money Institutions
Overview
| ROLE IN DELIVERY OF E-MONEY SERVICE | WHO PLAYS THIS ROLE? | |
|---|---|---|
| BANK | NON-BANK | |
| License to issue e-money | ||
| Direct communication with regulator to request authorization for, e.g., new services or revised transaction limits | ||
| Contractual agreement with customer | ||
| Branding of e-money service | ||
| Delivery of e-money service (directly and/or through agent network) | ||
| Safeguarding customer funds | ||
E-Money Institutions
ADVANTAGES & DISADVANTAGES
Advantages
- Most common regulatory approach in markets with high e-money adoption.
- Enables non-banks to lead design, delivery, and branding of e-money services while also directly licensing and supervising them.
- Creates legal separation between e-money issuer and parent company.
- Levels the applicable licensing framework among banks, telecom operators and fintechs building e-money businesses.
Disadvantages
- Financial authorities may have limited capacity to supervise additional entities.
- Financial authorities may lack understanding of risks specific to non-bank e-money issuance.
- May pose legal challenges around central bank supervisory powers over non-banks.
E-Money Institutions
EMI License Application
The following tool provides general guidance for analyzing applications for a license (or authorization) to operate as e-money institutions.
