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The differences between Banks and eMoney Institutions

The rapid development of financial technologies created a new instrument called Electronic Money Institution – a legal entity with a license to issue electronic money. Read in my article the differences between Banks and eMoney Institutions

Such a tool helps to significantly reduce operating costs, diversify risks, and also makes it possible to use e-currency to service payments of third parties. The latter is used by organizations such as PayPal and PerfectMoney.

Despite the fact that some consumers opt for traditional banking, the massive digitalization of the financial sector has confidently stepped into the era of electronic money. In Europe, the fact of having such a license considered as a guarantee of security.

Let’s compare the main features of conventional banks and EMIs and highlight the main differences.

Timing and costs

The first distinguishing feature is the cost and timing of obtaining a license. To obtain an Authorized EMI license (this is a full license, there is also a small one – Small EMI), you must have a capital of several hundred thousand euros. The requirements for the beneficiary are quite simple – he must have a good reputation and explain the source of the funds. In terms of time, it takes from six months to a year. Other expenses include the services of a lawyer, financial consultants, filing applications, etc., and in general, do not exceed another hundred thousand euros.

All in all, with half a million euros, you can get an e-money license and start your own EMI company. While it takes years to obtain a banking license, and the cost is about several millions of euros.

Control and regulation

The second feature is the control and regulation system. The activities of banks are controlled by the European System of Central Banks, the European Banking System, local authorities, and are regulated by hundreds of legislative acts.

EMIs are subject to the EU Payment Service Directives PSD and PSD2, the EU Electronic Money Directives, and the laws of the country of registration.

Also, it is important to note that payment services are not burdened with the obligation to exchange tax information, unlike banks.

Services range

The third feature is the services provided.

The main services of EMI services are transactions with current accounts, debit cards, acquiring. They are not allowed to credit, and this is the main focus of conventional banks. Another difference is the impossibility of depositing cash for EMI services. But you can open accounts remotely which is great due to lockdowns and remote work.

Use of funds

The fourth difference is the use of client funds. The customers funds of EMI are kept in a bank account and are inviolable. Such institutions earn only on commissions.

Banks, on the contrary, use client funds for lending and overdraft issuance.

Lower financial costs, faster process of getting a license, flexible control, convenience make EMI a very competitive financial tool.

I would be happy to answer any questions or submit your project to my team at Astorts Group for evaluation.

Alessandro Rocco Pietrocola is an entrepreneur and investor based in London and operating mainly in Europe, Asia and Oceania with main focus on UK, Baltic Countries, Russia, China, Hong Kong, Malaysia, Singapore, Middle East and New Zealand as area of interest! At the moment is the CEO of Astorts Group. He is an UK FCA (Financial Conduct Authority) Approved Person and is has great experience as director of regulated companies. He uses to dedicate part of his life to inspire others and help them achieve the most out of their life. Since he was 20, he had successfully founded and managed several companies operating in the field of management consulting, wealth management and fintech. He loves travelling, he is a cigars lover, an amateur golfer and a dapper man.


Please write me an email with your specific case or book a Skype call, my team and I will be more than happy to help you to find the best solution for your business need or to advice and support you to start the new business venture.

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