EMI or payment institution licence in the EU, and the agent route
What an e-money institution and a payment institution may do in the EU, the capital each needs, safeguarding, passporting, and launching as an agent first.
In the EU, providing payment services or issuing e-money takes a licence. Short of a bank, there are two: authorisation as an electronic money institution (EMI) under the E-Money Directive (Directive 2009/110/EC, EMD2), or as a payment institution (PI) under the Payment Services Directive (Directive (EU) 2015/2366, PSD2).
This guide is general information, not legal advice: the details depend on your services and your market, so confirm them with a lawyer and the regulator before you apply.
What each licence allows
A payment institution provides the services in Annex I to PSD2: cash in and out of payment accounts, transfers, direct debits, card payments, issuing payment instruments, acquiring, money remittance, payment initiation and account information. It may hold payment accounts only if they are used exclusively for payment transactions, and the money it holds is neither a deposit nor e-money (Article 18).
An e-money institution may provide the same services and also issue electronic money: electronically stored value that is a claim on the issuer, issued on receipt of funds and accepted by people other than the issuer (EMD2 Articles 2 and 6). It issues e-money at par and must redeem it at par at any time (Article 11). Neither may take deposits.
A balance that customers top up and spend later usually means e-money, which only e-money issuers, in practice e-money institutions and banks, may issue (Article 10). If money only passes through to a payee, as in remittance or acquiring, a payment institution licence can be enough. Technical providers that support payments without ever holding the funds, such as data processing or terminals, are outside PSD2 (Article 3(j)).
Who regulates it, and where
There is no EU-level licence. You apply to the authority of the member state of your registered office, which can be the central bank (PSD2 Article 22). Your head office must be in that country, and part of your payment business must happen there (Article 11(3)); EMD2 Article 3 applies these rules to e-money institutions. The European Banking Authority (EBA) issues guidelines and keeps a central register, though the national registers are the legal record.
Local presence expectations vary. The EBA's December 2025 peer review found some authorities require executive directors and heads of control functions to be based in the country, while others are more flexible.
Capital
Each licence has a minimum initial capital, and own funds may never fall below it (PSD2 Articles 7 and 8, EMD2 Articles 4 and 5):
What you do | Initial capital |
|---|---|
Money remittance only | €20,000 |
Payment initiation | €50,000 |
Any of Annex I points 1 to 5: accounts, transfers, cards, acquiring | €125,000 |
Issuing e-money | €350,000 |
Own funds grow with the business, by a method the authority chooses based on overheads, payment volume or income (PSD2 Article 9), plus 2% of average outstanding e-money for an e-money institution (EMD2 Article 5).
What the application asks for
PSD2 Article 5 lists the file, and the EBA's authorisation guidelines detail it for both licences:
Business: a programme of operations and a three-year business plan with a forecast budget.
People: directors and managers of good repute with relevant knowledge and experience, suitable qualifying shareholders, and sound governance and internal controls.
Safeguarding: how customer funds will be protected.
AML: internal controls against money laundering. Both institutions are obliged entities under the Anti-Money Laundering Directive; the AML Regulation applies from 10 July 2027.
Technology and outsourcing: security, incident handling and continuity in line with DORA, which has applied to both since 17 January 2025 (DORA Articles 2 and 64). Outsourcing must be notified, outsourcing important functions may not impair internal control, and the institution stays fully liable for agents and outsourcers (PSD2 Articles 19(6) and 20).
Safeguarding customer funds
PSD2 Article 10 allows two methods:
Segregation: customer funds are never mixed with money that is not customers', including yours. Funds not paid out by the end of the business day after receipt go into a separate account at a credit institution (or a central bank, at its discretion) or into secure, liquid, low-risk assets, insulated from other creditors in an insolvency.
Insurance or guarantee for the same amount, from an insurer or bank outside your group.
E-money institutions protect funds received for e-money the same way. Card top-ups and other payments by payment instrument must be safeguarded once they reach the institution, and no later than five business days after the e-money is issued (EMD2 Article 7).
Steps and timelines
Map your money flows to Annex I and the e-money definition. That fixes the licence and the capital.
Choose the home country and talk to its authority early.
File a complete application. The authority must decide within three months of receiving it, or of receiving the missing information (PSD2 Article 12).
Plan for longer. For 2022 to 2024, the EBA measured a median of 9.5 months from submission, from 4 to 6 months in some countries to 27 months in one, most often because of incomplete or weak files.
Passport. The authorisation is valid across the EU (Article 11(9)), and PSD2 is part of the EEA Agreement. You notify your home authority, which forwards the file within one month; the host has one month to respond, and the home authority decides within three months (Article 28).
Launching under someone else's licence
Before their own licence, companies can work inside a licensed institution's network:
Agent. Provides payment services on behalf of a payment or e-money institution (PSD2 Article 4(38)). The institution sends its authority the agent's details, AML controls and evidence its managers are fit and proper; the authority has two months to register it, and the agent may start only once registered. The agent tells customers whom it acts for, and the institution stays fully liable (Articles 19 and 20).
Distributor. An e-money institution may distribute and redeem e-money through people acting on its behalf, but may not issue it through agents; its payment services through agents follow the agent rules (EMD2 Article 3(4) and (5)).
Small institution. Some countries offer lighter registration up to a monthly average of €3 million in payment transactions (PSD2 Article 32) or €5 million of average outstanding e-money (EMD2 Article 9), without a passport.
E-money tokens: when crypto needs a payment licence
Under MiCA, e-money tokens (EMTs), crypto-assets referencing one official currency, are deemed e-money, and only a bank or an e-money institution may issue one (MiCA Article 48). A crypto-asset service provider may offer related payment services only if it, or a partner, is authorised under PSD2 (Article 70(4)).
The EBA's No Action letter of 10 June 2025 advises authorities to treat two services as payment services: transferring EMTs for clients, and holding EMTs in a custodial wallet that can send to and receive from third parties. Exchanging crypto-assets for funds or other crypto-assets is not one, nor is intermediating purchases of crypto-assets with EMTs. Authorisation was due from 2 March 2026. Its opinion of 12 February 2026 advises authorities to let firms continue if they are licensed or partnered with a licensed provider, for example as its agent. Applicants may continue under strict conditions, without marketing or new clients; the rest should stop and offboard clients. For the rest of MiCA, see the MiCA checklist.
PSD3 and the Payment Services Regulation
The Commission proposed PSD3 and a directly applicable Payment Services Regulation (PSR) on 28 June 2023. Parliament and Council reached a provisional agreement on 27 November 2025, which Parliament's economic affairs committee approved on 5 May 2026 (Legislative Train). On 6 October 2026 the texts awaited the Council's position, with an indicative plenary date of 14 December 2026 (Legislative Observatory). In the agreed texts (PSD3, PSR):
EMD2 is repealed and issuing e-money becomes a payment service, with its own capital and own funds rules.
Both apply 21 months after entry into force, two PSR articles after 27 months.
Existing institutions continue until 27 months after entry into force while their authority reviews them; e-money institutions that pass become payment institutions.
From entry into force, the PSR takes EMT trading out of the payment rules, but not transfers that pay for goods or services.
Common mistakes
A payment licence for a wallet. A stored balance for later spending usually means e-money.
Rewarding balances. Interest or any benefit tied to holding time is banned for e-money (EMD2 Article 12) and EMTs (MiCA Article 50).
A letterbox head office. Authorities check where the business is run.
Agents starting before they are registered.
What this means for your platform
Our white-label banking app, remittance app, payment gateway and SoftPOS platforms ship with the KYC/AML and compliance-reporting modules, and the ledger reconciles balances daily against bank and processor statements. Before your own licence, the accounts and IBANs module runs on a banking-as-a-service partner that holds one; afterwards it connects to your own bank and safeguarding accounts. We configure the platform to match your legal set-up.
Sources
All checked on 6 October 2026.
