E-money institution (EMI)
An e-money institution (EMI) is a company authorised under the EU's E-Money Directive to issue electronic money and provide payment services. It can hold client funds and run payment accounts with IBANs, but it can't lend those funds out, pay interest on them or offer deposit guarantee cover. Client money is safeguarded instead.
What an EMI can do
An EMI's core activity is issuing electronic money. When a client pays in funds, the EMI issues the same amount as e-money, and the client can spend it or redeem it at par value at any time.An EMI can also provide the payment services listed in the Payment Services Directive (PSD2). In practice, that means running payment accounts, executing credit transfers such as SEPA, SEPA Instant and SWIFT payments, and issuing payment cards. A business account at an EMI usually comes with an IBAN in the company's own name, so it receives and sends payments like any other account.
What an EMI can't do
An EMI can't take deposits. Deposit-taking is reserved for credit institutions, which is the legal term for banks.It can't lend out the money its clients hold. The E-Money Directive (Article 6) lets an EMI offer credit only as a side service to payments, such as a credit line on a payment card, and only under the conditions PSD2 sets in Article 18(4):- the credit is ancillary and granted only in connection with executing a payment transaction
- it's repaid within a short period, never longer than 12 months
- it isn't funded from money received to execute payments or in exchange for e-money
- the EMI's own funds stay appropriate for the total credit it has granted, as judged by its supervisor
EMI vs bank vs payment institution
| Bank (credit institution) | E-money institution | Payment institution | |
|---|---|---|---|
| Takes deposits | Yes | No | No |
| Issues e-money | Yes | Yes | No |
| Provides payment services | Yes | Yes | Yes |
| How client money is protected | Deposit guarantee, up to EUR 100,000 per depositor | Safeguarding | Safeguarding |
| Lends to clients | Yes | Only payment-linked credit, never from client funds | Only payment-linked credit, never from client funds |
| Pays interest on balances | Can | No | No |
| Minimum initial capital | EUR 5 million | EUR 350,000 | EUR 20,000 to 125,000, depending on services |
How authorisation works
An EMI is authorised by the financial supervisor of the EU country where it's based. It needs initial capital of at least EUR 350,000, ongoing own funds, a governance and risk framework, an AML programme and safeguarding arrangements approved by the supervisor.Member states can let smaller firms operate under a lighter small EMI regime if the e-money they have outstanding stays below a limit, set nationally at no more than EUR 5 million on average. Small EMIs can't operate outside their home country.A fully authorised EMI can passport its licence across the EEA. After notifying its home supervisor, it can serve clients in other member states directly or through branches, without a separate licence in each.How to check whether a firm is an authorised EMI
Every EU supervisor keeps a public register of the institutions it authorises. In Finland, that's FIN-FSA (Finanssivalvonta). The European Banking Authority also runs a central register of payment and e-money institutions across the EU. A firm that calls itself an EMI should appear in both.Example: Narvi
Narvi Payments Oy Ab is an e-money institution authorised and supervised by FIN-FSA in Finland, business ID 3190214-6. It provides business accounts with dedicated IBANs and SEPA, SEPA Instant and SWIFT payments to companies across the EEA.FAQ
No. An EMI can't take deposits or lend client funds, and its clients aren't covered by a deposit guarantee scheme. It's authorised under a different licence, with safeguarding protecting client money instead.
Client funds at an EMI must be safeguarded: kept separate from the EMI's own money and protected from its creditors if it becomes insolvent. That's a different protection from the deposit guarantee that covers bank deposits.
Yes. EMIs run payment accounts, and a business account at an EMI usually has an IBAN in the company's own name. It works for receiving and sending SEPA and SWIFT payments like any other IBAN.
Last reviewed October 22, 2026Disclaimer
This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Narvi Payments Oy Ab or its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Narvi Payments Oy Ab or its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
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Narvi Payments Oy Ab is an Authorized Electronic Money Institution (EMI). Narvi’s EMI license is granted by the Finnish Financial Supervisory Authority (FIN FSA) with the registration number 3190214-6. Narvi’s license is passportised to all European Union countries.
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