EMI or payment institution licence in the UK, or launch under a partner

E-money or payments, authorised or small: what the FCA asks for in capital, safeguarding and people, how long it takes, and when an agent or banking partner is the faster route.

· Head of IT
· 7 min read
An orange payment card with a gold pound coin and ledger, payout and shield blocks

A UK fintech that issues e-money or provides payment services needs permission from the Financial Conduct Authority (FCA), unless it is a bank or another exempt body: an e-money institution (EMI) licence under the Electronic Money Regulations 2011 (EMRs), or payment institution (PI) status under the Payment Services Regulations 2017 (PSRs). Many launch first under a partner's licence. This guide compares the routes.

It 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 applying.

What the activity is in law

  • E-money is electronically stored monetary value, a claim on the issuer, issued on receipt of funds for making payments and accepted by others (EMRs, regulation 2). A prepaid balance customers spend or send is the usual case.

  • Payment services are listed in Schedule 1 to the PSRs, among them executing payments, issuing payment instruments, acquiring, money remittance, payment initiation and account information.

  • Technical services are not payment services when the provider never holds the funds. The FCA's perimeter guidance says payment facilitators that contract with merchants are likely acquiring, while providing gateways or terminals is not, by itself.

So a banking app or e-wallet runs on e-money unless a bank provides the accounts, a remittance app without balances is money remittance, SoftPOS needs acquiring done by you or an acquirer, and a gateway that never touches funds may be a technical service.

Who regulates it, and where

The FCA authorises and registers both, and supervises their anti-money laundering controls, except for PIs authorised only for money remittance: HMRC supervises those, and they must register with it (Approach Document, 3.95 and 12.23).

An authorised PI must be a UK company with its head office in the UK and carry on part of its business here (PSRs, regulation 6). An authorised EMI may instead be a foreign company with a UK branch (EMRs, regulation 6), though a branch can only offer payment services linked to its e-money (PERG 3A.4). Small institutions need a UK head office.

The licences compared

Authorised EMI

Small EMI

Authorised PI

Small PI

Limit

None

Average outstanding e-money up to 5 million euros

None

Payments up to 3 million euros a month on average

Initial capital

350,000 euros

None below 500,000 euros of e-money, then 2% of it

20,000 euros for money remittance, 50,000 for payment initiation, 125,000 for payment accounts, execution, card issuing or acquiring

None

Own funds

The higher of 350,000 euros or the sum of 2% of average outstanding e-money and an amount for other payment services

2% of average outstanding e-money, from 500,000 euros

The higher of initial capital or one of three methods based on overheads, volume or income

None

Safeguarding

Required

Required

Required

Optional

Application fee

£5,640

£1,130

£2,820 for remittance, initiation or account information only, otherwise £5,640

£1,130

Small EMIs also cap other payment transactions at 3 million euros a month on average, and neither small type may offer payment initiation or account information. The thresholds are set in euros in the regulations; the fees are as the FCA listed them on 6 October 2026.

What the FCA asks for

Regulation 6 of each set of regulations covers authorisation:

  • People and governance. Directors and managers of good repute with payments or e-money knowledge, fit and proper owners, clear governance, risk management and internal controls, and a business plan with a three-year budget. The FCA also wants a main contact inside your firm, not an adviser, forecasts with two stress scenarios where applicable, and wind-down arrangements.

  • Safeguarding. Customer funds kept apart and, by the end of the business day after receipt, held in a designated account at a bank outside your group or the Bank of England, or in approved secure assets; or covered by insurance or a guarantee. E-money institutions follow the same model.

  • AML. Policies proportionate to your risks, and a named money laundering reporting officer.

  • Professional indemnity insurance, if you offer payment initiation or account information.

  • Technology and outsourcing. Tell the FCA before outsourcing any operational function. Outsourcing an important one, IT included, must not weaken internal control or the FCA's oversight (PSRs, regulation 25; EMRs, regulation 26), and you stay responsible for outsourced providers and agents (regulation 36). The FCA's operational resilience rules apply to both.

The safeguarding changes of 2026

PS25/12, published on 7 August 2025, added rules in force since 7 May 2026, mainly in CASS 15:

  • safeguarding reconciliations every day except weekends, public holidays and days when relevant foreign markets are shut;

  • a resolution pack, so funds can be returned quickly if you fail;

  • a new monthly safeguarding return;

  • an annual safeguarding audit, with the auditor's report due within 4 months, unless you have not had to safeguard more than £100,000 at any time for at least 53 weeks (SUP 3A);

  • one director or senior manager responsible for safeguarding oversight;

  • due diligence on whoever holds the funds, and a contingency plan 3 months before a safeguarding insurance policy or guarantee expires.

They apply to authorised PIs, all EMIs and small PIs that opt in. The FCA has not, for now, adopted a statutory trust over customer funds; it will review once a full audit period has passed.

Steps and the FCA's deadlines

  1. Map your services to the schedule and pick the licence, or a partner route.

  2. Ask for a pre-application meeting. PASS meetings are free.

  3. Apply through Connect with the forms, tailored policies, forecasts, safeguarding and wind-down plans, and the fee. Remittance-only firms need their HMRC registration or application number first.

  4. Assessment. A case officer is allocated within 20 working days. The FCA must decide within 3 months of a complete application, or 12 months of an incomplete one; the same applies to EMIs. In the first quarter of its 2026/27 year, the 38 cases it closed took a median of 219 days from receipt.

  5. Decision. Refusal comes by warning notice, then decision notice, which you can refer to the Upper Tribunal.

Launching under a partner

As an agent

A PI or EMI can provide payment services through you as its agent once the FCA has added you to its register. The principal applies, describing your AML controls and vouching for your directors, and the FCA must decide within two months of a complete application. It closed all 1,652 agent cases in the first quarter of 2026/27 within that deadline. You must tell customers you act as an agent, the principal answers for what you do, and your transactions count towards a small PI's limit.

As an e-money distributor

An EMI can distribute or redeem e-money through a distributor, who needs no FCA registration but cannot provide payment services; the EMI identifies its distributors to the FCA. No agent or distributor can issue e-money. Safeguarding starts when you receive customer funds, and it remains the EMI's duty (Approach Document, 10.35).

Banking-as-a-service

A banking-as-a-service partner, a bank or an EMI, holds the licence, the accounts and the customer funds; you run the product. Your legal role is still one of the above: agent, distributor, or supplier of technical or outsourced services. The FCA expects principals to oversee their agents effectively, so expect the partner's rules on onboarding, monitoring and complaints, and check its permissions on the FCA register.

Common mistakes

  • Registering as small and outgrowing the limit mid-launch. The FCA's guidance suggests applying for authorisation if you expect to exceed it.

  • Template policies, or an adviser as main contact.

  • Treating safeguarding as a bank account rather than a daily process with records and reconciliations.

  • Using an agent before it is on the register, or a distributor for payment services.

  • Outsourcing without telling the FCA.

  • Calling e-money a bank deposit: the FSCS does not cover the failure of a payments firm itself (PS25/12).

  • Using the FCA logo, which no firm may do (Approach Document, 7.2).

What this means for your platform

Safeguarding now runs on records: balances per customer, daily reconciliations, a resolution pack. Paynoramic's ledger module keeps double-entry books and reconciles daily against bank statements and processor files, and its accounts module connects to banking-as-a-service providers such as ClearBank, Modulr and Griffin, or to your own licence and safeguarding accounts. See the white-label banking app, remittance app, payment gateway and SoftPOS platforms; for card acceptance on a phone, our SoftPOS certification guide.

Sources

All checked on 6 October 2026.

Written by

Paynoramic's Head of IT

Head of IT

Head of IT at Paynoramic, responsible for the module library every platform is built from. Has worked on payment, banking and workforce platforms for companies including American Express, Teya and Indeed Flex, and for a global card issuer-processor. Writes about what a fintech or crypto launch needs beyond the software: licensing, certification and the real cost.

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