top of page
  • Julien Haye

Payment Institutions vs. Electronic Money Institutions

Understanding the difference between payment institutions and electronic money institutions

In the fast-evolving world of financial technology and digital payments, understanding the intricacies of various financial entities is crucial. Among these, Payment Institutions (PIs) and Electronic Money Institutions (EMIs)stand out as key players. While they may seem similar at first glance, PIs and EMIs serve distinct functions and adhere to different regulatory frameworks. This article aims to elucidate the differences between these two types of institutions, providing clarity for businesses and entrepreneurs navigating the financial services landscape.

What are Payment Institutions (PIs)?

PIs are financial entities authorised to provide specific payment services. Their primary role is to facilitate the movement of money, whether it's through direct transfers, payment processing, or remittances. PIs do not deal with issuing electronic money (e-money), which is a significant point of differentiation from EMIs.


Key Aspects of Payment Institutions:


  • Services Offered: PIs primarily focus on executing payment transactions, money remittance, and payment initiation services.

  • Regulatory Compliance: They adhere to regulations such as Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) but face generally less stringent requirements compared to EMIs.

  • Operational Scope: PIs are categorised as either Authorised Payment Institutions (APIs) or Small Payment Institutions (SPIs), depending on their transactional volume and scale.

Understanding Electronic Money Institutions (EMIs)


EMIs, on the other hand, are authorised to issue e-money – a digital equivalent of cash. They cater to a market that requires digital payment solutions beyond traditional banking, such as prepaid cards and digital wallets.


Key Aspects of Electronic Money Institutions:


  • E-Money Services: EMIs can issue, manage, and redeem e-money, providing a digital alternative to cash.

  • Additional Payment Services: Besides handling e-money, EMIs also offer standard payment services similar to PIs.

  • Higher Regulatory Standards: EMIs are subject to more rigorous regulatory requirements, reflecting the broader scope of their services and the need to safeguard customer funds.

Distinguishing Factors Between PIs and EMIs


  • Service Range: The fundamental difference lies in the service range. PIs are limited to payment services, whereas EMIs can also issue and manage e-money.

  • Regulatory Requirements: EMIs face a higher regulatory burden due to their ability to issue e-money, encompassing stringent compliance, operational, and capital requirements.

  • Business Model Diversity: EMIs offer a wider range of financial products and services, particularly beneficial for businesses aiming to provide innovative digital financial solutions.

  • Capital Obligations: Generally, EMIs have higher initial capital requirements, reflecting the added responsibilities of managing e-money issuance and redemption.


Choosing the Right Path for Your Business


For businesses venturing into the financial sector, the choice between becoming a PI or an EMI depends on their service offerings and operational goals. If the objective is to facilitate payments without handling e-money, a PI license is suitable. However, if a business plans to offer a broader range of services, including issuing e-money, then an EMI license is more appropriate.



The distinction between Payment Institutions and Electronic Money Institutions is pivotal in the realm of financial services. Each serves a unique purpose and caters to specific market needs within the digital payment ecosystem. Understanding these differences is crucial for businesses to make informed decisions about which path to pursue in the evolving landscape of financial technology.


Whether you are an entrepreneur looking to start a fintech venture or an existing business aiming to expand into new financial services, comprehending the nuances of PIs and EMIs is a critical step towards achieving your objectives in the dynamic world of digital finance.




Need Expert Guidance? We Can Help!


Are you considering applying for a PI License or EMI License and feeling overwhelmed by the complexity? Our consultancy specialises in guiding businesses through the intricacies of obtaining a License. With our expertise in regulatory compliance, financial planning, and strategic consultation, we can streamline your application process, ensuring that you meet all the necessary requirements with ease.


Don't navigate this journey alone. Contact us today for a consultation, and let us help you to unlock the potential of your business in the financial services sector. With Aevitium LTD's support, your path to obtaining a License can be clear and achievable.


Rated 0 out of 5 stars.
No ratings yet

Add a rating
bottom of page