What Is a UK EMI License and How to Get One: Requirements, Costs, and Process

A UK EMI licence is the approval a firm needs from the Financial Conduct Authority (FCA) to issue electronic money (e-money). Formally, it’s authorisation as an electronic money institution (EMI) under the Electronic Money Regulations 2011, or registration as a small EMI (SEMI). PSPs, payment companies and financial institutions need one to run e-money products in the UK, such as stored-value wallets or prepaid cards.

This guide explains the requirements for each route, what authorisation costs, how long the FCA takes to decide and how to apply, step by step.

What is e-money?

This term, often referred to as e-money, embodies value in a digital format, is stored electronically, and is used for an array of financial transactions. Acting as a digital surrogate for physical currency, e-money streamlines online purchases, financial dealings, and money transfers. Its presence is solely within the digital realm, with storage alternatives accessible through digital wallets or accounts, frequently accessible via computers, smartphones, or other electronic devices.

Common examples of e-money include the following.

• Prepaid cards. These come in both physical and virtual forms, preloaded with a specific monetary value that can be expended for purchases until the balance is depleted.
• Stored-value wallets. These hold balances topped up in advance, which can be spent or transferred through a mobile app or online account.

Cryptocurrencies such as Bitcoin and in-game currencies are not e-money. It’s a common misconception. Under the UK Electronic Money Regulations 2011, Bitcoin is not a claim on any issuer, and in-game currencies are typically accepted only within the issuer’s own game and cannot be redeemed for money.

What is a UK EMI licence?

The Financial Conduct Authority grants an electronic money licence to qualifying companies to issue and handle e-money for digital transactions. Electronic money represents a digital form of cash that is stored and transacted electronically. The licence requires institutions to comply with stringent standards, fostering consumer trust and financial stability.

Let’s see several capabilities a UK EMI licence grants PSPs, payment companies and financial institutions:

• Entities can issue e-money.
• The licence permits companies to offer services, including conducting e-payment transactions, transferring money, and operating payment accounts.
• Since the Brexit transition period ended on 31 December 2020, a firm with a UK e-money licence can no longer extend its services throughout the European Economic Area (EEA) through passporting. Firms serving both UK and EEA customers typically need a separate authorisation in an EU or EEA country.
• Firms with this licence must comply with stringent FCA requirements, encompassing consumer protection, anti-money laundering (AML) protocols, and maintaining financial stability.

Who needs an EMI licence?

EMI licences are intended to regulate and supervise entities that issue electronic money and provide related payment services. Therefore, obtaining an EMI licence is a must-have for PSPs and payment companies offering services such as e-wallets, prepaid cards, and other digital payment solutions that involve issuing e-money.

Basically, any non-bank entity intending to issue e-money in the UK needs to obtain a licence. This applies to larger entities seeking authorised EMI (AEMI) status and smaller entities opting for registration as a small EMI. The FCA oversees and regulates the issuance of EMI licences to ensure that institutions comply with the standards and regulations.

Entities that engage in activities involving the issuance of electronic money need a licence. This includes the following:

• Digital wallets that hold customer balances
• Prepaid cards, physical or virtual
• Other forms of e-money that can be used for making transactions

Authorised EMI vs Small EMI: which route fits

The FCA offers two routes for issuing e-money in the UK. An authorised EMI has no limit on how much e-money it can issue. A small EMI is registered rather than authorised and must stay within two limits set by the Electronic Money Regulations 2011. Its average outstanding e-money cannot exceed €5 million, and if it also offers payment services unrelated to e-money, those payments cannot exceed a monthly average of €3 million. Both limits also apply in their sterling equivalent (Electronic Money Regulations 2011, regulation 13 and Schedule 2).

The small EMI route has lighter requirements, but the limits are strict. Once a small EMI goes over either limit, it has to apply to become an authorised EMI. Most importantly, a small EMI cannot provide cross-border services, meaning it cannot serve customers outside the UK, even when operating from the UK. It also cannot provide payment initiation or account information services.

The small EMI route suits PSPs and payment companies launching a new e-money product with low expected volumes. The authorised EMI route suits firms that expect to outgrow the small EMI limits, plan to serve customers outside the UK, or need payment initiation or account information services.

Key requirements for obtaining the licence

The process of obtaining a licence involves meeting specific requirements assessed by the FCA. These requirements vary for AEMIs and SEMIs:

For Authorised Electronic Money Institutions (AEMIs)

• Adequate Initial Capital. AEMIs must demonstrate that they possess sufficient initial capital to establish and operate their electronic money services.
• Robust Governance Arrangements, Internal Controls, and Risk Management Procedures. AEMIs must establish and maintain robust governance structures, internal controls, and risk management procedures. This includes implementing systems that effectively identify, assess, and manage risks associated with electronic money services.
• Fit and Proper Individuals. Individuals with qualifying holdings in the institution must be fit and proper. This involves an assessment of their integrity, competence, and financial soundness. This requirement applies to directors and persons responsible for managing e-money and payment services.
• Compliance with Money Laundering Regulations (MLRs). AEMIs must comply with the Money Laundering Regulations (MLRs) to prevent and detect money laundering and terrorist financing activities. This involves implementing robust anti-money laundering (AML) measures.
• Safeguarding Measures. AEMIs must take adequate measures to safeguard e-money holders’ funds. This includes keeping the funds received in exchange for e-money separate from the institution’s own funds, or covering them with an insurance policy or comparable guarantee.
• Effective Supervision. AEMIs should not prevent effective supervision by the FCA, especially if there are close links to another person. Foreign laws should not hinder the FCA’s ability to supervise the business if the links extend beyond the UK.

For Small Electronic Money Institutions (SEMIs)

• E-Money and Transaction Limits. SEMIs must not generate average outstanding e-money of more than €5 million. Additionally, if they provide payment services unrelated to e-money, the monthly average of these payment transactions over 12 months must not exceed €3 million.
• Fit and Proper Individuals. Like AEMIs, SEMIs must ensure that individuals with qualifying holdings are fit and proper. This applies to directors and persons responsible for managing e-money and payment services.
• Compliance with MLRs. SEMIs must comply with the Money Laundering Regulations (MLRs) to address money laundering risks associated with their operations.
• Safeguarding Measures. SEMIs must implement measures to safeguard funds received in exchange for e-money. This is crucial for the protection of customer funds.
• Effective Supervision. Similar to AEMIs, SEMIs should not hinder effective supervision by the FCA, especially if there are close links to another person, even if located outside the UK.

Meeting these requirements and providing the necessary supporting material during the application process is essential for obtaining and maintaining an EMI licence in the UK. The FCA assesses the applications thoroughly to ensure that licence holders operate in a manner that is secure, compliant, and protective of consumer interests.

Both AEMIs and SEMIs are supervised by the FCA for compliance with the Money Laundering Regulations 2017. In practice, this means carrying out customer due diligence, monitoring transactions, keeping records, and reporting suspicious activity to the National Crime Agency.

How much does a UK EMI licence cost?

The cost of a UK EMI licence has three parts. These are the FCA application fee, the capital the firm must hold, and the cost of preparing the application and the compliance setup. In 2026, the FCA application fee is £5,640 for an authorised EMI and £1,130 for a small EMI, according to the FCA’s application fees page. Under the Electronic Money Regulations 2011, an authorised EMI must also hold initial capital of at least €350,000, while a small EMI has no fixed initial capital requirement.

This capital is not a fee. It stays in the business, but it must be in place before the FCA grants authorisation. After that, an authorised EMI must keep its own funds at or above the higher of €350,000 or 2% of its average outstanding e-money (Schedule 2 of the Electronic Money Regulations 2011).

Beyond FCA fees and capital, most of the budget goes on preparing the application and building the setup the FCA expects to see. This usually covers legal and consultancy support, compliance and AML staff, a safeguarding account and audit arrangements, and IT and security systems. After authorisation, EMIs also pay annual FCA fees and other regulatory levies, which depend on the size of the business.

One ongoing cost the FCA has priced itself is the annual safeguarding audit, which an EMI must arrange if at any point in the past 53 weeks it had to safeguard more than £100,000 of customer funds. In its 2025 policy statement (PS25/12), the FCA estimates this audit costs a firm with a simple business model £10,000 to £18,000 a year with a smaller audit firm, or £30,000 to £60,000 with a large one, and £75,000 to £250,000 a year for complex firms.

How long does it take to get an EMI licence in the UK?

The FCA must decide on a complete application within 3 months and an incomplete one within 12 months, under regulation 9 of the Electronic Money Regulations 2011. In July 2025, the FCA set a voluntary 10-month target for incomplete payments and e-money applications, but the 12-month legal limit still applies.

Preparation adds more time. According to Regulatory Counsel (2026), preparing the application pack takes 4-5 months. Deloitte UK (2024) says the whole process often takes around 12 months.

How to obtain an e-money licence in the UK: step by step

To get an EMI licence in the United Kingdom, you apply to the FCA through its Connect system. The process has five steps, from choosing a licence type to meeting your obligations after authorisation.

Step 1: Choose an authorised or small EMI

Under the Electronic Money Regulations 2011, you can register as a small EMI only if your average outstanding e-money stays within €5 million. If you also provide payment services, your monthly payment transactions must average no more than €3 million over 12 months. Above these limits, you need full authorisation.

Step 2: Prepare your plan, capital and safeguarding

Write a business plan and a programme of operations, including financial information. An authorised EMI must hold at least €350,000 in initial capital under Schedule 2 of the Electronic Money Regulations 2011. You also need a plan for safeguarding customer funds. The FCA’s safeguarding rules changed on 7 May 2026.

Step 3: Submit through FCA Connect

Submit your application through Connect and follow the FCA’s guidance for EMI applicants. If the minimum information is missing, the FCA rejects the submission without assessing it. As of 2026, the FCA application fee is £5,640 for an authorised EMI (Category 5) and £1,130 for a small EMI (Category 3). You pay it in Connect when you apply, and it is non-refundable. Your supporting material should cover:

• Programme of operations and business plan, including financial information
• The people responsible for your e-money services and their qualifications
• Anyone with a qualifying holding in your firm
• Controls to meet the Money Laundering Regulations (MLRs)
• Initial capital and how you calculate ongoing capital requirements
• Measures to safeguard funds received in exchange for e-money
• Governance, internal controls and risk management
• Incident reporting, sensitive payment data, business continuity and statistical data collection
• Your security policy and security-related complaints policy
• Professional indemnity insurance or a comparable guarantee, if you provide AIS or PIS
• Outsourcing arrangements, if any
• Use of agents and branches, including on-site and off-site checks

Step 4: FCA review and decision

A case officer reviews your application and may ask for more information, so answer quickly and in full. The FCA must then decide within the statutory deadlines set out in the “How long does it take to get an EMI licence in the UK?” section. Under regulation 4 of the Electronic Money Regulations 2011, the FCA must keep a public online register of authorised and small EMIs, so approved firms appear on the Financial Services Register.

Step 5: Meet ongoing obligations

An authorised EMI must hold own funds of €350,000 or 2% of its average outstanding e-money, whichever is higher (EMRs 2011, Schedule 2;FCA). It must reconcile safeguarded funds daily and file a monthly safeguarding return through My FCA within 15 business days of month-end (FCA, 2026). It also files an annual FIN060 return within 30 business days of its accounting reference date, plus annual controllers, close links and financial crime reports (SUP 16.15). Finally, it must tell the FCA about changes such as new directors (EMRs 2011, regulation 17).

EMI vs Payment Institution: which authorisation do you need?

The main difference is e-money. An EMI can issue e-money and also provide payment services. A payment institution, either authorised (API) or small (SPI), can provide payment services but cannot issue e-money. The FCA states that any firm issuing e-money in the UK must be authorised or registered as an EMI, unless it holds a Part 4A permission, as a bank does, or is exempt.

Choose based on your product. Customers may load money that is kept as a stored balance and spent later with other merchants, such as a prepaid card or a wallet balance. That is usually e-money, and you need an EMI. If you only move money, a payment institution authorisation is enough. Examples are acquiring card payments, sending remittances, executing transfers or initiating payments from a customer’s bank account. The legal test is the definition of electronic money in regulation 2 of the Electronic Money Regulations 2011, so check your product against it before you apply.

The FCA regulates both under one framework. The Payment Services Regulations 2017 (PSRs) cover payment institutions, and the EMRs 2011 cover EMIs. The FCA explains both in a single Approach Document, most recently updated in May 2026. Both routes apply through Connect and have the same 3-month and 12-month decision periods under regulation 9 of each set of regulations. Both must also safeguard customer funds under the FCA’s safeguarding rules.

Benefits of obtaining an e-money institution licence

Having an EMI licence in the UK gives institutions credibility and market access.

Trust and legal recognition

An EMI licence shows that the FCA has approved the institution, which builds trust with customers who feel safer using a licenced provider. It also gives the institution legal status as an authorised e-money issuer, which matters when it enters agreements and partnerships in the financial sector. In return, licence holders must meet FCA standards, which keeps their operations transparent and accountable.

Market access

The licence lets institutions widen their range of services, reach a larger customer base and offer new financial products and technologies.

Consumer protection and safeguarding

EMIs must safeguard the funds they receive in exchange for e-money, which gives e-money users an extra layer of protection. They must also hold adequate initial capital, so they have the financial capacity to operate responsibly.

Operational and competitive effects

To get the licence, institutions must set up robust governance, internal controls and risk management. These support compliance and also make operations more efficient and secure. Together with the licence itself, they set an institution apart from unlicenced providers and help it attract customers and partners.

For payment companies, an EMI licence is both a regulatory requirement and a strategic step. It builds trust, opens new markets and supports long-term growth.

How to enhance your payment solution with advanced technologies

If your EMI or payment institution also accepts payments for merchants, the licence alone does not process a single transaction. That acquiring or PSP line still needs a technology layer: gateway infrastructure, routing and cascading, and merchant management. The FCA looks at this layer before it grants authorisation. An EMI or PI application must describe your security policy, how you handle incidents and sensitive payment data, your business continuity arrangements and any outsourcing. Your platform therefore needs to be in place, or at least fully designed, while you prepare the application.

Building this layer does not have to mean a long and costly development project. To launch faster, you can use a ready-to-use white-label payment gateway solution.

Akurateco is a reputable white-label payment gateway provider. We offer PCI DSS Level 1 payment software with advanced features, including intelligent payment routing and cascading, decline reason management, optimised checkout, automated merchant onboarding and more. The platform offers 700+ integrations with global and local banks and payment providers. We provide the technology layer on top of your acquirers and do not process transactions ourselves. We do not provide e-money accounts, wallets, card issuing or ledger technology. The authorisation and the regulatory responsibility stay with your institution. To stay competitive in the UK market, explore Akurateco’s UK payment methods guide page.

PSPs, payment companies and financial institutions that use white-label Akurateco can fully rebrand the system and market it as their own. This saves the time and cost of building a payment system from scratch or updating an outdated one. See how white-label works for payment service providers.

Conclusion

If your product issues e-money, such as a stored balance that customers spend later, you need an EMI licence. If you only move money, a payment institution authorisation is usually enough. In both routes, the small tier suits lower volumes, while full authorisation removes the volume limits but requires more capital and a fuller application. Whichever route you choose, the FCA expects a complete application, safeguarding arrangements and technology that is ready to support your service.

Accepting payments for merchants under your EMI? Book a demo of Akurateco’s white-label payment gateway.

FAQs about UK EMI Licence

What is an EMI licence?

An EMI licence is an FCA authorisation or registration that lets a firm issue electronic money and provide payment services in the UK. It’s granted under the Electronic Money Regulations 2011 in two tiers: authorised EMIs and small EMIs. Holders of either must safeguard customer funds and meet FCA capital and reporting rules.

Is an EMI a PSP?

Yes. Under the Payment Services Regulations 2017, an EMI counts as a payment service provider (PSP) whenever it provides payment services, just like banks and payment institutions. What sets an EMI apart from other PSPs is that it can also issue electronic money, such as a stored balance on a prepaid card or wallet.

Can a UK EMI operate in the EU after Brexit?

Not with its UK licence alone. UK EMIs lost their EU passporting rights when the Brexit transition period ended on 31 December 2020, so an FCA licence no longer covers customers in EU member states. To serve the EU, a UK group usually sets up an EU entity and gets it authorised as an EMI by an EU regulator. That entity can then passport across the EEA.

Can you buy a ready-made EMI licence in the UK?

Not the licence itself. FCA authorisation belongs to the company, so you buy its shares. Taking 10% or more needs FCA approval first, which can take up to 60 working days once your notification is complete. The FCA can cancel an EMI that hasn’t issued e-money within 12 months.

What is the difference between an authorised and a small EMI?

The main difference is scale. Under the Electronic Money Regulations 2011, a small EMI is capped at €5 million of average outstanding e-money. If it also provides payment services, its monthly payment transactions are capped at €3 million. An authorised EMI has no volume cap but must hold at least €350,000 in initial capital. As of 2026, the small route also has a lower FCA application fee: £1,130 against £5,640.