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Difference between EMI and API in the UK / EU countries

E-money, a contemporary form of payment instrument, has arisen with the advent of new tech solutions. Its popularity is on the rise due to factors such as the increasing challenges associated with opening traditional bank accounts and cards, coupled with the fast growth of digital breakthroughs. E-money effectively caters to diverse customer needs. Two main categories of financial entities in this domain are the API and the EMI, the latter being the issuer of e-money. Thus, it becomes crucial to know what the dissimilarities are between them.

EMI license

First thing first, let’s consider what is an EMI bank account as well as the EMI key aspects.

This is a financial institution that enables users to make e-transactions, often through prepaid cards or digital wallets. Licensing terms for EMIs vary by country. In Europe, this process is governed by EMD or PSD2. In the UK, the licensing is typically under the EMRs.

Common obligations for a company are as follows:

  • Sufficient capital and financial stability.
  • Adequate policies and protocols governing the business operation.
  • Safeguarding customer funds to ensure their safety.
  • Fit and proper assessments for key personnel.
  • Adherence to AML/CTF norms.

The allowed activities often include:

  • Issuing e-money and maintaining e-money accounts.
  • Enabling payments within a network.
  • Transfer of money.
  • Providing services related to e-money issuance.

The framework for EMIs is established by applicable authorities in each jurisdiction. For example, in the EU, the EBA and national competent authorities oversee compliance with the EMD or PSD2. In the UK, the FCA is responsible for regulating EMIs under the EMRs.

Regulatory oversight includes:

  • Reporting and audits to ensure compliance.
  • Monitoring of monetary stability and customer fund safeguarding.
  • Enforcement actions in case of non-compliance.

EMIs play a crucial role in the evolving sphere of digital finance, providing innovative solutions for e-transactions while operating within a robust regulatory framework to protect consumers and maintain financial stability. Always refer to the specific terms of the relevant jurisdiction for the most accurate and up-to-date information.

API license

This is a company permitted to act as a provider of payments. Services include various activities related to the initiation, execution, and processing of transactions. APIs are regulated entities that facilitate payments, but they do not issue e-money.

Licensing criteria for API are defined by regulators, such as the EBA and national competent authorities in EU member states. The authorizing process typically involves meeting specific obligations, including:

  • Adequate capital.
  • Internal control standards.
  • Fit and proper assessments for key individuals.
  • Conformity to AML and CTF norms.

PIs are authorized to operate as a provider of a number of services, which may include:

  • Performance of transactions, including a transfer of funds.
  • Issuing and/or acquiring instruments (e.g., cards).
  • Remittance service.
  • Account information service.

The organizational framework for PIs is primarily established by the PSD in Europe. It provides a harmonized legal vehicle for the provision of services across EU states. Regulatory oversight is conducted by national competent authorities in each member state. In the UK, for example, the FCA is responsible for regulating PIs.

Comparative Analysis: EMI vs. API

Authorizing Process and Prerequisites:


  • Authorizing Process: The authorization process for EMIs involves approval from financial authorities. This typically includes demonstrating monetary stability, governance structures, safeguarding mechanisms for customer funds, and adherence to AML and CTF norms.
  • Prerequisites: EMIs are required to meet specific capital obligations, have robust internal controls, and ensure that their key personnel are fit and proper. They must also comply with ongoing reporting and auditing obligations.


  • Authorizing Process: This process includes regulatory approval from authorities such as the EBA and national competent authorities. Key criteria include capital adequacy, governance standards, and conformity with AML and CTF regulations.
  • Prerequisites: API needs to meet capital terms, have proper governance structures, and ensure their personnel are fit and proper. Adherence to AML and CTF regulations is crucial, and ongoing reporting obligations are common.

Permitted Activities and Business Scope:


  • Permitted Activities: EMIs are eligible to issue e-money, maintain e-money accounts, and facilitate transactions within a network.
  • Business Scope: An EMI company primarily focuses on e-money issuance and associated services. They do not typically engage in traditional banking but play a vital role in the digital payments ecosystem.


  • Activities: APIs are authorized to provide various services, including the performance of payments, issuing and acquiring payment tools, remitting, and AIS services.
  • Business Scope: APIs have a broader scope, covering a range of payment-related activities.

To sum up, both EMIs and PIs bring to the transformation of digital finance, addressing the changing needs of consumers in an era of advancing technology. In navigating the complex regulative mechanisms of the UK and the EU, businesses seeking to establish EMIs or PIs must carefully adhere to licensing obligations, ensuring adequate capitalization, robust governance structures, and adherence to AML and CTF regulations. Ultimately, as the financial industry continues to undergo transformation, the roles of EMIs and PIs are expected to expand, contributing to a more dynamic and inclusive financial ecosystem.

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