EMIs are an important part of Europe’s financial system, helping consumers and businesses manage their money in the digital era. With over 500 such institutions established across the EU, EMIs have become a mainstream alternative to traditional banking for many types of financial services.
What is E-Money?
E-money is a digital alternative to cash. It allows its holder to make cashless payments via money stored on a phone, prepaid card, or online account. An Electronic Money Institution (EMI) is a type of financial institution which is authorised to issue and manage e-money on behalf of its users.
How Do EMIs Differ from Banks?
While EMIs and banks share some similarities, they differ considerably in scope. Banks can accept deposits, extend credit, and offer a full range of financial products including mortgages and investment services. EMIs specialise in payment services and e-money issuance; they cannot extend credit from customer deposits, but they provide faster, more digital-native payment infrastructure with streamlined onboarding and better API access.
Is My Money Safe with an EMI?
Yes: EMIs operating under the EU Electronic Money Directive are required to safeguard client funds separately from their own operational funds. This means customer balances are protected even in the event of the EMI’s insolvency. This is a strict regulatory requirement, not a discretionary practice.
Where Do EMIs Operate?
EMIs emerged in the EU financial market following the Parliament’s passage of Directive 2009/110/EC. Large numbers of EMIs have since been established in particularly forward-thinking financial jurisdictions, including Malta, Lithuania, Ireland, and the UK. FinXP is licensed as an EMI by the Malta Financial Services Authority (MFSA) and is EU/EEA passported, meaning it can provide services across all European Economic Area member states.
