What Is A UK E-Money Institution License And How To Get It
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Canary Wharf LondonOur team can help you with your UK E-money license. Contact us and we will help you with the process.
What is a UK e-money institution license? An e-money institution is a financial entity that is authorized for developing services related to electronic money (credit cards and similar) and payments related to it.
The United Kingdom is considered one of the best e-money licensing jurisdictions.
Benefits Of A UK E-Money Institution License
You can legally register a British company and get a financial license issued by the FCA, which will allow you to establish an e-Money company in less than 12 months.
With the license you can start operating and obtaining benefits around the world, opening your IBAN, SWIFT, and SEPA accounts and offer your own payment cards.
You’d probably ask: well, what’s the difference between this and a bank? Basically, an e-Money institution cannot provide loans or keep deposits that accumulate interests.
This means that e-Money institutions have lesser regulations and supervision, which makes it a more flexible business structure.
So, what would be the benefits of obtaining such a license in the UK?
- You’ll acquire an English SWIFT code for transactions
- You’ll be able to issue English IBAN accounts for your clients
- You’ll be able to register accounts remotely for individuals and companies
- You’ll be able to issue credit and debit card payments linked to your customer accounts
- Your company will be able to perform bank payments in more than 45 currencies worldwide
- You can accept payments from all international accounts that use the SWIFT system
- Create correspondent accounts in different countries
- Acquire your AML department
- Your financial services are VAT-exempt in the UK
- No restrictions regarding the turnover of the company
What An E-Money Institution Can Do
- Services that allow placing cash on a payment account and all operations needed for operating payment accounts
- Services that allow cash withdrawals from payment accounts and operations required for operating such accounts
- Execution of payment transactions, such as:
Execution of direct debits
Execution of payment transactions through payment cardsExecution of credit transfers
- Executing payment transactions where the funds are conducted through a credit line for a service customer, such as:
Execution of direct debits
Execution of payment transactions through payment cardsExecution of credit transfers
- Issuing payment instruments and acquiring payment transactions
- Remitting money
- Payment initiation services
- Account information services
- Issuing e-money and providing operational services and ancillary services regarding issuing e-money or payment services
- Operating payment systems
However, as of today, these provisions apply mostly to banks and not AEMIs (Authorized e-Money Institutions).
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Main Types Of E-Money Institutions
There are two main types of e-Money institutions in the UK: Small e-Money Institution (SEMIs) and Authorisede-Money Institutions (AEMIs).
What’s the difference? SEMIs have an average payment turnover of less than €3m per month. That means the registration process is less expensive and simpler, but they cannot provide their services to other EEA member states.
AEMIs have average monthly turnovers of over €3m. Thus, they pass through a more stringent licensing process and can provide their services in the EEA, for example, through authorized agents in other member states.
How Will Brexit Affect E-Money Institutions?
One of the main benefits of obtaining a British e-Money license was that it had passporting rights. That meant it had free access to the EU market and allowed you to establish your services in other EU countries without needing to apply for further licenses.
Right now, the UK is on a transition period until December 31, 2020, where it still has passporting rights. Nevertheless, the conditions after that period will depend on the agreement the EU and the UK reach this year.
As of today, e-money institutions operate across the EEA freely with a UK license. They have passporting rights to the EEA and EU as long as the regulator of the other country is notified.
Brexit
5 Reasons To Get A UK E-payment License
Highly Respected Financial Jurisdiction
If you get an e-payments license in the UK, you’re playing in the big leagues.
UK licenses are widely regarded as the best in the world and the top jurisdiction that holds almost three-quarters of the European market.
Reliable Regulatory Authority
The FCA (Financial Conduct Authority) is the regulatory body which overseas this.
It is widely known for its fair rules, clear instructions, and up-to-date information.
Yes, the process is stringent, but you can’t keep your reputation as the best unless you are good at identifying risks. If you are a legit business with sufficient expertise, you’ll get fair treatment.
Easy Steps To Become A Bank
From an e-payments license, you can transition into a bank. That means you don’t have to start the process from scratch.
Instead, you can turn your e-payments provider into a bank through another fair and swift process in one of the top banking jurisdictions in the whole world.
Banking business men shake hands
Free Economy
According to the Index of Economic Freedom, the UK is the 7th freest economy on the planet. Even if some statist measures have been taken in the last 20 years, the spirit of Margaret Thatcher still lives.
Businesses enjoy top trade and business freedom in the country, and with Brexit, we'll likely see a new tax regime that will improve the fiscal health of the UK.
Full EEA Access
Yes! We know that, in principle, that’s only until the end of this year.
However, it should be noted that the relationship regarding financial services between the UK and the EU is a marriage by convenience.
They need each other. The possibilities of not reaching a bilateral agreement, or, at least, individual agreements with most EU members are small.That means that, in all likelihood, the British e-payment licenses will still hold passporting rights.
Process To Get A UK E-Money License
First, you must submit the following documents along with your application (the list is not exhaustive, for a full list, please contact us right here :
- Company statutes
- Operation program
- Business plan
- Proof of capital over the minimum required
- Description of measures taken to protect the funds of the customers
- Description of the responsibility agreements and internal administrative, accounting, and risk management mechanisms
- Descriptions of the internal control mechanisms established to comply with obligations related to preventing financial terrorism and money laundering
- Description of the organizational structure
- ID information of the individuals that hold qualified shares or voting rights and evidence of the aptitude of these individuals to guarantee the correct management of the institution
- ID of the directors, especially the responsible persons for the activities related to the emission of e-money from the institution and their good reputation
- Information of the company that will conduct audits
- Address of the registered office
Our team can help you get the license in these easy steps:
- Documentation: our experts prepare the necessary documents for the application
- Company formation: our experts we’ll help you open your company and bank accounts and any other corporate matters
- License application: Here we’ll formally submit the application alongside the required documents
- Following the process: we keep in touch with the FCA to see if everything is going well
- Final decision
Our team can help you with your UK E-money license. Contact us and we will help you with the process.
Check out these other Citizenship and Second Passport options.
▸ The 5 Best Second Passport Islands In The Caribbean
▸ How To Get Panama Residency And Other Visas
▸ Important Facts And Benefits Of A Vanuatu Second Passport
▸ Grenada Citizenship By Investment Program
▸ St Kitts And Nevis Citizenship By Investment Program
▸ Why Panamanian Residency Is Easier Than Most Others
