Executive Summary
- UK. The Financial Conduct Authority (FCA) assesses the business, its owners and managers, funding, customer-fund protection and operational controls. Paying the application fee does not establish eligibility. (FCA, Electronic money institution applicants, “Conditions you must meet”.)
- UK and EU. Full EMI authorisation requires at least €350,000 initial capital. Ongoing own-funds requirements can exceed that amount. Customer funds subject to safeguarding must remain protected separately from the firm's operating expenditure. (Electronic Money Regulations 2011, regulation 19 and Schedule 2, paragraph 2; Directive 2009/110/EC, articles 4–5 and 7; CASS 15.2.1R.)
- UK. The application fee is £5,640 for an authorised EMI and £1,130 for small EMI registration. These fees are separate from regulatory capital and operating costs. (FEES 3 Annex 10R, entries (1)–(2); FEES 3 Annex 1AR, Categories 3 and 5.)
- UK. Safeguarding preparations must address the rules effective from 7 May 2026, including records, reconciliations, resolution information and applicable audit requirements. (CASS 15; CASS 10A; SUP 3A.)
- EU. An EMI obtains authorisation from its home-state regulator. An Irish-authorised EMI can extend authorised services into other EU states through the applicable passport notification procedure. A UK permission does not provide that EU passport. (Central Bank of Ireland, Passporting In/Out for Electronic Money Institutions; FCA, Considerations for firms after the EU withdrawal transition period, “End of passporting”.)
The proposed business and the licensing jurisdiction
The application must identify which company will issue e-money and which activities it will perform. E-money involves stored monetary value, a claim against the issuer, receipt of funds and acceptance by another person. A wallet label alone does not establish that the product meets those elements. (Electronic Money Regulations 2011, regulation 2, definition of “electronic money”; Directive 2009/110/EC, article 2(2).)
For an in-scope UK business, the applicant approaches the FCA. An EU applicant selects a home Member State and its competent authority. The Central Bank of Ireland handles the Irish route. The commercial plan should identify the proposed issuer, customer markets and operating location before the application is prepared. (FCA, Apply to become an electronic money or a payment institution, “The rules in our Handbook”; Central Bank of Ireland, Payment Authorisation, opening statement of competence.)
Permission in one market does not settle access to the other. Passporting between the UK and EEA ended on 31 December 2020. A business proposing operations in the UK and EU must assess the permission required for each part of its structure. (FCA, Considerations for firms after the EU withdrawal transition period, “End of passporting”.)
Initial capital and continuing funding
A full EMI applicant must provide at least €350,000 initial capital. That figure applies to UK authorisation and the EU full-authorisation route. It is a capital requirement, rather than a payment to the regulator. (Electronic Money Regulations 2011, Schedule 2, paragraph 2; Directive 2009/110/EC, article 4; Bank of Lithuania, Authorisation of Electronic Money Institutions, “Key requirements for an EMI being established or authorised”.)
The continuing calculation depends on the business. For e-money issuance, Method D starts at 2% of average outstanding e-money, subject to permitted supervisory adjustments. A full EMI must respect the €350,000 floor. Unrelated payment services require a separate own-funds calculation, so a combined business cannot budget solely from the e-money percentage. (Electronic Money Regulations 2011, regulation 19 and Schedule 2, paragraphs 13, 15 and 23; Directive 2009/110/EC, article 5(1)–(5).)
The financial plan must also fund the proposed operation. Salaries, technology contracts, professional costs and an orderly closure require resources beyond any fee paid on submission. Projected losses must be considered when assessing whether required capital will remain available. The Irish regulator expressly expects capital planning through stressed conditions. (Central Bank of Ireland, Expectations for PIEMI Authorisation and AISP Registration, pp. 17–18.)
Small EMI registration in the UK
Small EMI registration can suit a business within the applicable limits. Average outstanding e-money must not exceed €5 million. Unrelated payment transactions, including those through agents, must remain within the €3 million monthly average limit over the preceding 12 months. For a business that has not started, the FCA tests projected average outstanding e-money against the €5 million limit. Other registration conditions still apply, and this route does not permit account information or payment initiation services. (FCA, Electronic money institution applicants, “Conditions you must meet”; Electronic Money Regulations 2011, regulation 13.)
Small status does not always remove capital requirements. At average outstanding e-money of €500,000 or more, the initial requirement is at least 2%. An ongoing requirement also applies. Below €500,000, the FCA identifies no initial capital requirement under this regime. Customer-fund safeguarding remains required for issued e-money. (Electronic Money Regulations 2011, Schedule 2, paragraphs 3 and 14; FCA, Our Approach, May 2026, paragraphs 9.29–9.35; CASS 15.1.2R.)
The company, its owners and its management
The FCA's published conditions permit a UK-incorporated body with its head office, and relevant registered office, in the UK. They also permit a body with an overseas head office and a UK branch. A UK subsidiary is therefore not the only possible corporate structure. The FCA examines central management and administrative functions when identifying the head office. (FCA, Our Approach, paragraphs 3.50–3.51.)
The regulator also examines who owns and runs the applicant. For the UK application, a qualifying holding generally includes at least 10% of capital or voting rights. Significant influence can bring a smaller holding within the assessment. The submission must identify qualifying holders and provide the required controller information. (FCA, Electronic money institution applicants, “Registering people with qualifying holdings”.)
An Irish applicant must demonstrate an appropriate operational presence in Ireland and effective local management. The Central Bank expects a board with sufficient expertise and an appropriate balance of executive, non-executive and independent directors. Outsourcing support does not remove the applicant's need to manage the outsourced activity. (Central Bank of Ireland, Expectations for PIEMI Authorisation and AISP Registration, pp. 5, 13 and 18.)
The application documents
The application must describe a business that the regulator can assess against the requested permissions. The programme of operations should explain issuance, redemption, related payments and any unrelated payment services. A business plan must connect those activities to customer demand, expected volumes, staffing and financial forecasts. EU application requirements include forecast budgets for the first three financial years. (Directive (EU) 2015/2366, article 5(1)(a)–(b), applied to EMIs through Directive 2009/110/EC, article 3(1), as amended by Directive (EU) 2015/2366, article 111.)
A transaction-flow diagram can expose a material gap. It should identify who receives customer money, when e-money is issued, where safeguarded funds are held and how redemption occurs. Those steps must agree with the contracts, system design and financial projections. The FCA invites fund-flow and customer-journey explanations and rejects generic application material that does not describe the applicant's business. (FCA, Apply to become an electronic money or a payment institution, “Information you must provide”.)
The supporting evidence must also address internal controls, security, continuity, complaints, outsourcing and anti-money-laundering procedures. The application should identify the responsible people and explain how they perform the controls. A policy that assigns transaction monitoring to an unappointed function leaves the proposed arrangement unexplained. (Directive (EU) 2015/2366, article 5(1)(e)–(l), applied through Directive 2009/110/EC, article 3(1).)
Safeguarding customer funds
A UK applicant must establish arrangements that protect relevant customer funds and prevent their use for the firm's own account. Segregation and qualifying insurance or guarantee arrangements are recognised safeguarding methods. The chosen method must work for the actual receipt and movement of funds. (CASS 15.2.1R, 15.3 and 15.5.)
Under the rules effective from 7 May 2026, safeguarding records must support the required internal and external reconciliations. The general minimum frequency is once each reconciliation day, subject to the specified exceptions. An institution using unlimited insurance or guarantee cover has a distinct internal-calculation rule. The applicant must select the applicable process rather than assume that every safeguarding method requires identical reconciliations. (CASS 15.8.10R–15.8.19R and 15.8.42R.)
The institution must maintain a retrievable resolution pack. Its contents include relevant account agreements, acknowledgement letters, safeguarding procedures and information about responsible people. Access must remain possible when records sit with a group company or service provider. This requires adequate access arrangements and usable records before a failure occurs. (CASS 10A.1.3R, 10A.1.7R and 10A.2.1R.)
Safeguarding audits require a separate assessment. SUP 3A generally applies to EMIs, but includes an exemption where the institution has not been required to safeguard more than £100,000 at any time for at least 53 weeks. Senior management must keep eligibility under review. A small-EMI label alone does not establish that exemption. (SUP 3A.1.1R–3A.1.4G and 3A.3.2R.)
The monthly safeguarding return is due within 15 business days after month-end. The rule excludes the month in which the firm becomes a safeguarding institution. Reporting capability should therefore be included in the launch preparations. (SUP 16.14A.3R–16.14A.4R.)
Technology and operational resilience
The technology plan must support the service described in the application. Security controls, incident handling, business continuity and oversight of service providers require identifiable owners and operational procedures. These matters form part of the FCA's published EMI application requirements. (FCA, Electronic money institution applicants, “Supporting material for AEMI applicants”.)
EU applicants must also address the Digital Operational Resilience Act (DORA), which has applied since 17 January 2025. The Central Bank identifies ICT risk management, incident reporting, resilience testing and ICT third-party risk among its requirements. A proposed Irish EMI should address those subjects in its technology and outsourcing preparations. (Central Bank of Ireland, Digital Operational Resilience Act (DORA), introductory description of applicable requirements.)
Submission, fees and decision timing in the UK
The FCA receives applications through Connect. The applicant should use an internal contact who understands the business and can respond to regulatory questions. External advisers can assist, but the FCA asks for a main contact at the firm. (FCA, Apply to become an electronic money or a payment institution, “Prepare your application” and “Information you must provide”.)
An authorised EMI application falls within Category 5, currently £5,640. Small EMI registration falls within Category 3, currently £1,130. The applicable fee is separate from capital, adviser charges and operating expenditure. (FEES 3 Annex 10R, entries (1)–(2); FEES 3 Annex 1AR.)
The FCA must decide a complete application within three months. An incomplete application has a 12-month decision period. Completeness requires the information and evidence needed for a decision; the first upload does not necessarily start the three-month period. A decision can be a refusal. (Electronic Money Regulations 2011, regulation 9(1)–(2); FCA, Our Approach, paragraphs 3.197–3.200.)
The Irish application process
An Irish applicant starts with the Central Bank's Payments Authorisation Team, a required initial meeting and a Key Facts Document. The process proceeds through exploratory assessment, detailed assessment and a final decision. Applications are submitted through Kiteworks using access arranged with the team. (Central Bank of Ireland, Payment Authorisation, “Stage 1: Exploratory Stage” and “Frequently Asked Questions”.)
The Central Bank charges no application submission fee; authorised firms pay an annual industry funding levy. Its service target covers 90% of assessment phases within 90 business days, with clock stops and specified exclusions. Separately, the statutory decision period is three months from receipt of a complete application. These periods do not guarantee a launch date. (Central Bank of Ireland, Payment Authorisation, “Central Bank Service Standards” and “Frequently Asked Questions”; Expectations for PIEMI Authorisation and AISP Registration, p. 10.)
A “Minded to Authorise” letter precedes the final grant. The applicant must satisfy outstanding requirements and agree the proposed conditions and capital. Final approval also depends on no new adverse information reaching the Central Bank. Regulated activities can commence after the authorisation letter issues. (Central Bank of Ireland, Expectations for PIEMI Authorisation and AISP Registration, pp. 8–9.)
Permission to launch and expand
The UK grant identifies the approved activities, applicable requirements and effective date. Launch preparations must follow those terms. Completion of an application, payment of a fee or a favourable discussion with the regulator does not replace the grant. (Electronic Money Regulations 2011, regulation 9(4)–(5); FCA, Our Approach, paragraphs 3.202–3.203.)
An Irish-authorised EMI proposing services in another EU Member State must complete the relevant passport notification process. Branches, agents, distributors and cross-border services require the appropriate route. The permitted activity remains tied to the home-state authorisation; expansion into a new country does not enlarge its substantive scope. (Central Bank of Ireland, Passporting In/Out for Electronic Money Institutions, “Branch / Engagement of Agents and/or Distributors” and “Cross Border / Freedom of Services”.)
