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PSD3 / PSR final texts agreed April 2026. The E-Money Directive is being repealed.
Payment & E-Money Licensing (EMI / PI)
The right payments licence, in the right jurisdiction — chosen with the new EU rulebook in view, not just the current one.
The licence you choose now will live under a different rulebook
For fifteen years, EU payments licensing has run on a two-track system: payment institutions under PSD2, e-money institutions under the E-Money Directive. That architecture is now being replaced. The final compromise texts of the Third Payment Services Directive (PSD3) and the Payment Services Regulation (PSR) were agreed in April 2026, with formal adoption expected later this year. The package repeals the E-Money Directive entirely: e-money issuance becomes a payment service, and EMIs become a sub-category of payment institutions under a single authorisation framework.
Two consequences matter for anyone planning a licence today. First, existing authorisations will not simply roll over — the texts give current EMIs and PIs a transitional window (24 months from the new directive's entry into force, extendable to 30 at the regulator's discretion) to demonstrate compliance with the new requirements, after which non-compliant firms are cut off. Second, the conduct rulebook moves from a directive into a directly applicable regulation, applying about 21 months after entry into force — which points to the new regime biting around 2028.
- 23 April 2026Final compromise texts of PSD3 and the PSR agreed
- Expected later in 2026Formal adoption and Official Journal publication
- About 21 months laterThe PSR conduct rulebook applies directly, which points to the new regime biting around 2028
- 24 to 30 monthsTransitional window. Existing EMI and PI authorisations do not simply roll over: firms demonstrate compliance with the new requirements, and non-compliant firms are cut off
So the licensing question is no longer just "EMI or PI, and where?" It's "which licence, where, on what timeline — and how does it transition?" A licence obtained in the next year will be applied for under today's rules and re-papered under tomorrow's. We plan both legs from the start.
EMI or PI: what your money flows actually trigger
The distinction is simpler than the market makes it, and it turns on one question: do you hold stored value for customers?
A payment institution (PI) executes payments: transfers, acquiring, money remittance, payment initiation, account information. Money passes through; it doesn't sit as a stored balance the customer can redeem.
- Transfers, acquiring, money remittance
- Payment initiation and account information
- No stored customer balances
Initial capital: €20,000–€125,000 by services
An e-money institution (EMI) can do everything a PI does and issue electronic money — stored value on wallets, prepaid cards, customer balances redeemable at par. If your product has a "top up" button or shows customers a balance you owe them, you're in e-money territory.
- Wallet balances and prepaid cards
- E-money redeemable at par
- MiCA gateway to e-money tokens
Initial capital: €350,000
The regulatory price of that extra power is capital and scrutiny. Under the current directives, initial capital runs in tiers: €20,000 for money remittance only, €50,000 for payment-initiation services, €125,000 for the full payment-services set — and €350,000 for an EMI. Ongoing own-funds requirements then scale with volume.
- €20,000Payment institution: money remittance only
- €50,000Payment institution: payment-initiation services
- €125,000Payment institution: the full payment-services set
- €350,000E-money institution
Two smaller doors exist and are often missed. Member states may operate small-institution regimes — for payment institutions averaging no more than €3 million a month in transactions, and small EMIs with limited outstanding e-money — with lighter requirements but a hard limit: no passporting. A small licence is a domestic licence. It can be the right first step for a single-market launch, and the wrong one for anything cross-border.
And one door many fintechs hope exists, doesn't quite: the agent and exclusion routes (commercial agent, limited network, intra-group). They're real, they're narrow, and the incoming PSR harmonises exactly the two exclusions — commercial agent and limited network — whose loose national interpretations firms have relied on. Part of our first step is testing honestly whether you need a licence at all, on the wording that's arriving, not the folklore.
What safeguarding really means
The obligation that shapes an EMI or PI's daily operations isn't the capital — it's safeguarding: customer funds must be protected, either segregated into accounts with a credit institution (or invested in secure, liquid assets) or covered by an insurance policy or comparable guarantee. Funds must be identifiable, reconciled, and insulated from the firm's insolvency. Regulators test the mechanics of this harder than anything else in the application — and the incoming package tightens the regime further. Getting the safeguarding architecture right, including the bank relationships to run it, is where licence applications are won or quietly lost.
What the application actually contains
Licensing is a documentation exercise before it is anything else. The current directive and the EBA's authorisation guidelines prescribe the dossier, and every serious regulator works from the same skeleton:
- Programme of operations — the regulated services, precisely mapped
- Business plan with a three-year financial forecast
- Evidence of initial capital
- Safeguarding arrangements, described operationally
- Governance arrangements and internal controls
- Procedure for security-incident monitoring and reporting
- Sensitive-data handling and records
- Business-continuity arrangements
- Security policy and IT/risk assessment
- AML/CFT internal-control mechanisms
- Identity and suitability of directors and qualifying shareholders (fit and proper)
- Statutory auditors, legal status and head office
Regulators don't grade on effort — they grade on whether the dossier describes a real, operable institution. That's what "application-ready documentation" means as a service: we write the pack so it survives the reviewer, and so your team can actually run the institution it describes.
Where to apply: the honest version
There's no universal best jurisdiction — there's the best jurisdiction for your markets, budget, timeline and credibility needs. The candidates recur:
- Lithuaniabuilt the EU's largest fintech licensing hub on speed and regulator accessibility
- Ireland, the Netherlands and Luxembourgtrade longer processes for supervisory weight that enterprise partners recognise
- the UKis a separate regime post-Brexit — no EU passport, but London-grade credibility and its own reform of safeguarding rules in progress
- Singaporeanchors APAC under the Payment Services Act
An EU/EEA licence passports across the whole Union; a UK or Singapore licence does not reach the EU, and vice versa — for many clients the real question is which two licences, in which order.
Set these candidates against each other on capital, passporting and supervisory character in the jurisdiction comparator on the Fintech Licensing Hub.
We rank the realistic options for your case — capital, timeline, substance expectations, supervisory culture, banking access — rather than pushing a default. And under the incoming single rulebook, one classic reason for jurisdiction shopping (divergent national conduct rules) is deliberately being removed; what remains decisive is the supervisor, the substance bar, and the speed.
The crypto bridge: why EMIs suddenly matter more
One development has quietly raised the EMI licence's value: under MiCA, e-money tokens — fiat-referenced stablecoins — may only be issued by credit institutions or e-money institutions. For crypto and payments groups with stablecoin ambitions, the EMI authorisation isn't just a wallet licence anymore; it's the gateway to compliant stablecoin issuance in the EU. If that's on your roadmap, it changes which licence to seek and where — and we plan it together with the MiCA workstream, not as an afterthought.
Our approach
- 1Model & activity assessmentWhat your product does in regulatory terms — including whether an exclusion honestly covers you, tested against the incoming harmonised wording — and therefore what licence, if any, your flows trigger.
- 2Licence & jurisdiction rankingEMI vs PI vs small-institution regimes, across a ranked shortlist of realistic jurisdictions, with capital, timeline, substance and banking-access trade-offs stated plainly.
- 3Transition planHow the recommended route lives through the PSD3/PSR change: what re-authorisation will ask of you, and what to build now so the transition is paperwork rather than surgery.
- 4Requirements breakdownGovernance, safeguarding architecture, fit-and-proper, capital and substance expectations for the chosen route — as a checklist your team can staff against.
- 5Application-ready documentationThe full dossier: business plan, safeguarding and governance policies, security and AML frameworks, and the submission pack in the shape the regulator's own guidelines prescribe.
- 6Through authorisationRegulator questions, requisition responses, and the operational readiness review before you go live.
Who it's for
- Payments startups and walletsdeciding between EMI and PI before committing capital.
- Neobanks and marketplaces handling fundsthat have outgrown reliance on a BaaS partner's licence.
- Fintechs expanding into a new marketwho need to know which licence travels — and which needs a second application.
- Crypto and stablecoin projectsfor whom the EMI licence is the MiCA-mandated gateway to e-money token issuance.
- Licensed EMIs and PIsthat now need a PSD3 transition plan for re-authorisation.
FAQ
An e-money institution can issue and hold electronic money — stored value customers can redeem — while a payment institution executes payments without holding stored balances. Which you need turns on your actual money flows, not your product's label; that's the first thing we confirm. Under the incoming PSD3, the two regimes merge into one framework, with e-money issuance as a payment service within it.
Sometimes not — commercial-agent, limited-network and intra-group exclusions exist, and agent/distributor arrangements let you operate under another institution's licence. But the exclusions are narrow, regulators police them, and the incoming PSR harmonises the two most-stretched ones. We test this honestly before recommending an application.
Initial capital under the current rules: €20,000–€125,000 for a payment institution depending on services, €350,000 for an EMI — plus ongoing own-funds requirements that scale with your volumes, and realistic operating capital on top. The business plan has to show all three.
The obligation to protect customer funds — segregated with a credit institution or invested in secure liquid assets, or insured — so they're identifiable and insolvency-remote. It's the most operationally demanding part of the regime and the part applications most often underestimate.
There's no universal answer — it depends on your markets, budget, timeline and how much supervisory credibility you need. An EU/EEA licence passports across the Union; UK and Singapore licences don't reach it. We rank the realistic options for your case rather than pushing a default.
Months, not weeks, and it varies widely by jurisdiction and completeness of the application. We give you a realistic timeline up front so you can plan runway around it — and a dossier built to the regulator's own guidelines is the biggest controllable factor.
Usually not. The new regime realistically bites around 2028, markets won't wait, and firms authorised under the current rules get a transitional window to re-demonstrate compliance. The right move is to apply now with the new requirements in view — so the transition is an update, not a rebuild. That's what the transition plan in our approach is for.
Under MiCA, e-money tokens may only be issued by credit institutions or e-money institutions — so the EMI licence is precisely the non-bank route to compliant fiat-referenced stablecoin issuance in the EU, with MiCA's own issuance obligations layered on top. If stablecoins are on your roadmap, say so at the licensing stage; it changes the plan.
Where this fits. This engagement chooses and wins the licence. Choosing a Payment Processor is the operator's side of the same money flow, for teams that accept payments through someone else's licence. AML / KYC & Financial-Crime Programs builds the financial-crime chapter of the dossier, and Digital Asset Licensing carries the MiCA side of the stablecoin route. If the entity itself is still an open question, the Incorporation Hub compares the jurisdictions side by side.
Find your licensing path
Tell us your model and target markets. You'll get a ranked shortlist with the trade-offs that matter — capital, speed, credibility, passporting — and a transition-proof plan to apply.
Get a Licensing PathfinderGeneral information about payments and e-money licensing, not legal advice. Capital figures are the current directive minima and the PSD3/PSR package will change the framework around them. Nothing here is a prediction of how any regulator will decide an application.