E-Money Institutions

Overview

ROLE IN DELIVERY OF E-MONEY SERVICEWHO PLAYS THIS ROLE?
BANKNON-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.