EMI, PI, MSB & Global Licensing Categories: Complete Guide for Fintech Companies in 2026

• Four Primary License Types: EMI (Electronic Money Institution), PI (Payment Institution), MSB (Money Services Business), and national payment licenses represent the core regulatory frameworks governing fintech operations globally

• Geographic Specificity: EMI and PI licenses apply primarily to EU/UK markets, MSB licenses govern US/Canada operations, while national licenses vary significantly across other jurisdictions

• Capability Differences: Each license type enables different financial services—EMIs can issue e-money and cards, PIs focus on payment processing, MSBs handle money transmission, and national licenses vary by country

• Product-License Alignment: Your fintech product determines which license you need—digital wallets typically require EMI or national wallet licenses, payment processing needs PI or PSP licenses, and cross-border transfers require MSB or equivalent authorizations

• Multi-Jurisdiction Strategy: Operating globally requires understanding and obtaining multiple license types across different regulatory regimes, making licensing strategy a critical component of international expansion

Electronic Money Institution licenses are issued primarily in Europe and the United Kingdom, representing one of the most comprehensive fintech licensing frameworks available. EMI licenses allow companies to issue electronic money and provide broad financial services without obtaining a full banking license, making them particularly attractive for digital banks, neobanks, and fintech companies offering comprehensive financial services.

What EMIs Can Do

EMI licenses enable a wide range of financial services that closely approximate traditional banking capabilities:

Issue IBAN accounts: EMIs can provide customers with International Bank Account Numbers (IBANs), allowing them to receive salaries, make direct debits, and conduct standard banking transactions. This capability is essential for neobanks and digital banking platforms seeking to replace traditional bank accounts.

Issue cards: EMIs can issue both debit and prepaid cards under major card networks (Visa, Mastercard), enabling customers to make purchases, withdraw cash from ATMs, and conduct online transactions. Card issuance is critical for consumer-facing fintech products.

Hold customer funds: EMIs can hold customer funds in safeguarding accounts, maintaining balances on behalf of users. These funds must be segregated from the institution's operational funds and protected according to regulatory requirements, ensuring customer protection even if the EMI fails.

Enable international payments: EMIs can facilitate cross-border payments, currency exchange, and international transfers, making them ideal for companies serving globally mobile customers or businesses with international operations.

Support merchant payments: EMIs can process merchant transactions, enabling e-commerce platforms, point-of-sale systems, and business payment solutions.

Offer digital wallets: EMIs can provide comprehensive digital wallet solutions with stored value, transaction history, and integrated payment capabilities.

Provide FX and remittance services: EMIs can offer foreign exchange services and international remittances, competing with traditional money transfer operators and banks.

What EMIs Cannot Do

Despite their broad capabilities, EMI licenses have important limitations that distinguish them from full banking licenses:

Lend customer funds: EMIs cannot provide loans, credit facilities, or overdrafts using customer deposits. This restriction prevents EMIs from engaging in traditional banking activities that involve credit risk and fractional reserve banking.

Provide interest-bearing savings: EMIs generally cannot offer interest on customer deposits, limiting their ability to compete with traditional banks on savings products. Some EMIs partner with licensed banks to offer interest-bearing accounts indirectly.

Invest customer deposits: EMIs must safeguard customer funds rather than investing them for profit, preventing the maturity transformation and investment activities that characterize traditional banking.

Geographic Scope and Passporting

EMI licenses issued in one EU member state benefit from passporting rights, allowing the institution to operate across all EU countries without obtaining separate licenses in each jurisdiction. This regulatory harmonization significantly reduces the complexity and cost of European expansion.

Following Brexit, UK EMI licenses no longer automatically passport into the EU, and EU EMI licenses don't automatically cover the UK. Companies seeking to serve both markets typically need separate authorizations or must establish subsidiaries in both jurisdictions.

Countries Where EMI Licenses Are Common

Popular jurisdictions for obtaining EMI licenses include:

Lithuania: Known for efficient licensing processes, competitive costs, and supportive regulatory environment. Vilnius has emerged as a major fintech hub with numerous EMIs headquartered there.

Ireland: Offers English-language regulation, strong legal framework, and access to EU passporting. Dublin attracts many international fintech companies.

Germany: Provides credibility and regulatory rigor through BaFin supervision, though licensing processes can be more demanding and time-consuming.

UK: The Financial Conduct Authority (FCA) issues EMI licenses with high regulatory standards and strong consumer protection frameworks.

France: ACPR (Autorité de Contrôle Prudentiel et de Résolution) supervises EMIs with comprehensive regulatory oversight.

Sweden: Finansinspektionen provides EMI licensing with strong digital infrastructure and innovative regulatory approaches.

Best Use Cases for EMI Licenses

EMI licenses are ideal for:

• Neobanks and digital banks offering comprehensive banking alternatives

• Multi-currency account providers serving international customers

• Payment platforms requiring card issuance capabilities

• Remittance companies offering international transfers with local account capabilities

• Fintech companies needing to hold customer funds and provide IBAN accounts

• E-wallet providers requiring broad financial service capabilities under strict EU/UK regulation

Payment Institution licenses allow companies to provide payment services within the EU and UK but do not authorize the issuance of electronic money. PI licenses are narrower in scope than EMI licenses but sufficient for many payment-focused fintech business models.

What PIs Can Do

Payment Institution licenses enable several important financial services:

Process payments: PIs can facilitate payment transactions between parties, including account-to-account transfers, payment initiation services, and transaction processing.

Support remittances: PIs can offer international money transfer services, competing in the global remittance market.

Handle merchant acquiring: PIs can provide merchant services, processing card payments and other transactions for businesses.

Offer FX services: PIs can provide foreign exchange services, enabling currency conversion for international transactions.

Operate payment accounts: Depending on the specific authorization level, some PIs can operate payment accounts that facilitate transactions, though these differ from the e-money accounts that EMIs provide.

What PIs Cannot Do

Payment Institution licenses have significant limitations compared to EMI licenses:

Issue e-money: PIs cannot issue electronic money, limiting their ability to hold customer balances in the same way EMIs can.

Hold customer balances long-term: While PIs may temporarily hold funds during transaction processing, they generally cannot maintain customer balances as a core service offering.

Issue cards independently: PIs typically cannot issue payment cards directly, though they may partner with EMIs or banks to offer card services.

Typical PI Use Cases

Payment Institution licenses are appropriate for:

• Payment processing platforms focused on transaction facilitation rather than balance holding

• Remittance companies that move money between accounts without maintaining customer balances

• B2B billing and invoicing platforms that process business payments

• Payment initiation service providers (PISPs) under PSD2 that initiate payments from customer bank accounts

• Account information service providers (AISPs) that aggregate financial data

• Merchant acquiring companies processing business transactions

PI vs. EMI: Choosing the Right License

The choice between PI and EMI licenses depends on your business model:

Choose PI if you're primarily processing payments without needing to hold customer funds, issue cards, or provide comprehensive account services. PI licenses typically have lower capital requirements, simpler compliance obligations, and faster approval processes.

Choose EMI if you need to issue cards, hold customer balances, provide IBAN accounts, or offer comprehensive digital banking services. EMI licenses require higher capital reserves, more extensive compliance frameworks, and longer approval timelines but enable broader service offerings.

In the United States and Canada, fintech companies typically operate as Money Services Businesses (MSBs), which represents a fundamentally different regulatory framework than the EU/UK licensing regimes.

What MSBs Can Do

MSB registration enables several financial services:

Handle money transmission: MSBs can transmit money domestically and internationally, forming the foundation for payment platforms, remittance services, and money transfer operations.

Operate remittances: MSBs can provide international money transfer services, competing with traditional remittance operators like Western Union and MoneyGram.

Sell or issue stored value: MSBs can offer prepaid cards, digital wallets, and other stored value products.

Process FX transactions: MSBs can provide currency exchange services for customers.

Work with banking partners: MSBs typically partner with licensed banks to access payment rails, hold customer funds, and offer broader services. These partnerships enable MSBs to provide bank-like services without obtaining banking licenses.

Key MSB Requirements

Operating as an MSB in the United States involves complex, multi-layered compliance:

FinCEN registration: All MSBs must register with the Financial Crimes Enforcement Network (FinCEN), the US Treasury bureau responsible for combating money laundering and financial crimes.

State-by-state licensing: The United States does not have a single federal MSB license. Instead, most states require separate money transmitter licenses, meaning companies must obtain and maintain licenses in all states where they operate—potentially requiring 50 separate licenses with varying requirements, capital reserves, and compliance obligations.

Bank partnership alternative: Some fintech companies avoid state-by-state licensing by partnering with licensed banks that hold the necessary authorizations. The fintech operates as a service provider to the bank, which maintains regulatory responsibility. This "bank partnership" or "sponsor bank" model significantly reduces licensing complexity but requires finding willing banking partners and sharing economics.

AML/BSA compliance: MSBs must implement comprehensive Anti-Money Laundering (AML) programs complying with the Bank Secrecy Act (BSA), including customer identification programs, transaction monitoring, suspicious activity reporting, and record-keeping.

Strong reporting processes: MSBs must file Currency Transaction Reports (CTRs) for transactions over $10,000, Suspicious Activity Reports (SARs) for potentially illicit activity, and various other regulatory reports.

Canadian MSB Framework

Canada has a more centralized MSB registration system through FINTRAC (Financial Transactions and Reports Analysis Centre of Canada), though provincial securities regulations may also apply depending on services offered. Canadian MSBs face similar AML/CFT obligations as US counterparts but with a single federal registration rather than state-by-state licensing.

MSB Is Essential For

• Cross-border money transfer platforms operating in North America

• Digital wallet providers serving US/Canadian customers

• Payment platforms facilitating money transmission

• Cryptocurrency exchanges and virtual currency services (which are typically classified as MSBs)

• Check cashing services and money order providers

• Prepaid card programs and stored value products

Challenges of MSB Operations

Operating as an MSB in the United States presents significant challenges:

Regulatory complexity: Managing 50 different state licenses with varying requirements, renewal schedules, and compliance obligations requires substantial legal and compliance resources.

Capital requirements: State money transmitter licenses typically require surety bonds or capital reserves in each state, potentially requiring millions of dollars in total capital across all jurisdictions.

Banking access: MSBs often face difficulty obtaining and maintaining banking relationships, as banks view them as high-risk customers due to AML concerns. This "de-risking" phenomenon has forced many legitimate MSBs to struggle with basic banking access.

Compliance costs: Maintaining comprehensive AML programs, filing required reports, and managing multi-state licensing creates substantial ongoing compliance costs that can be prohibitive for early-stage startups.

Outside the EU, UK, US, and Canada, each country maintains its own licensing framework for payment services, electronic money, and financial technology. These national licenses vary significantly in requirements, capabilities, and regulatory rigor.

Saudi Arabia

SAMA Payment License: The Saudi Arabian Monetary Authority (SAMA) issues payment licenses for companies operating in the Kingdom. These licenses enable digital wallets, payment processing, and integration with local payment systems like SARIE (Saudi RTGS).

Stored Value / Digital Wallet License: Specific authorizations for companies offering stored value products and digital wallet services.

Saudi Arabia has been actively developing its fintech ecosystem, with regulatory sandboxes and supportive policies encouraging innovation while maintaining strong consumer protection and AML standards.

Brazil

Sociedade de Crédito: Credit society licenses for lending activities.

Payment Institution: Similar to EU PI licenses, authorizing payment processing and related services.

PIX ecosystem compliance: Brazil's instant payment system PIX has become ubiquitous, and payment providers must integrate with and comply with PIX requirements to serve the Brazilian market effectively.

Brazil represents one of Latin America's most sophisticated fintech markets, with progressive regulation and high digital adoption.

Oman

Central Bank of Oman Payment Service Provider License: Authorizes payment services, digital wallets, and financial technology operations under Central Bank supervision.

Oman has been modernizing its financial services regulation to attract fintech investment and innovation.

United Arab Emirates

ADGM & DIFC Money Services License: The Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC) are special financial free zones with their own regulatory frameworks, offering licenses for fintech companies serving regional and international markets.

Central Bank payment licenses: For operations in mainland UAE, the Central Bank of the UAE issues payment service provider licenses.

The UAE has positioned itself as a regional fintech hub, with supportive regulation, strong infrastructure, and access to Middle Eastern and African markets.

Singapore

MPI (Major Payment Institution): For larger payment service providers exceeding specified transaction thresholds, requiring more extensive capital and compliance requirements.

SPI (Standard Payment Institution): For smaller payment service providers below MPI thresholds, with proportionate regulatory requirements.

Singapore's Monetary Authority of Singapore (MAS) has created a sophisticated, risk-based licensing framework that balances innovation with consumer protection. Singapore serves as a gateway to Southeast Asian markets.

South Africa

SARB Payment Provider Certification: The South African Reserve Bank certifies payment service providers operating in South Africa, with requirements for capital, governance, and compliance.

South Africa represents the most developed fintech market in Africa, with growing digital adoption and increasing regulatory sophistication.

Other Notable Jurisdictions

Australia: Australian Financial Services License (AFSL) for payment services

Hong Kong: Stored Value Facility (SVF) licenses and Money Service Operator (MSO) licenses

Japan: Payment Services Act registration for various payment services

Mexico: CNBV (Comisión Nacional Bancaria y de Valores) licenses for fintech institutions

India: RBI (Reserve Bank of India) authorizations for payment systems, prepaid instruments, and digital wallets

Each jurisdiction has unique requirements, timelines, and regulatory expectations that must be thoroughly researched before market entry.

Selecting the appropriate license depends fundamentally on your fintech product and target markets:

Digital wallet? → EMI (EU/UK), MSB (US/Canada), or national wallet license (other countries)

Payment processing? → PI (EU/UK), PSP license (various countries), or MSB with bank partnership (US)

Cross-border payouts? → MSB (US), PI or EMI (EU), national PSP license (other countries)

Merchant acquiring? → PI with acquiring authorization (EU), MSB with bank partnership (US), national acquiring license (other countries)

Mobile money integration? → National telecom-approved license (common in African and Asian markets where mobile money is prevalent)

Card issuance? → EMI (EU/UK), partnership with licensed issuer (US), or national card issuing license

Lending services? → Banking license or specialized lending license (varies significantly by jurisdiction)

Cryptocurrency services? → MSB registration (US), national crypto licenses (varies), or operation under existing payment licenses where permitted

To illustrate how licensing works in practice, consider a payments company launching in Saudi Arabia that wants to offer digital wallets and instant local transfers.

Licensing Process

1. License Application: The company applies for a SAMA Payment License through the Saudi Arabian Monetary Authority, submitting comprehensive documentation including corporate structure, shareholder information, business plan, financial projections, and technical architecture.

2. Documentation Submission: Required materials include articles of incorporation, shareholder background checks, AML/CFT policies and procedures, technology security assessments, operational procedures, customer protection policies, and capital adequacy documentation.

3. Compliance Team Formation: The company establishes a compliance function with expertise in Saudi AML rules, consumer protection regulations, data privacy requirements, and payment system regulations.

4. Technical Integration: Systems are integrated with SARIE (Saudi Real-Time Gross Settlement system) for large-value transfers, local payment service providers for retail transactions, card networks for card-based transactions, and banking partners for fund custody and settlement.

5. Regulatory Approval: After SAMA reviews the application, conducts due diligence, and potentially requests additional information or modifications, the license is granted.

6. Operational Launch: After approval, users can add money via bank transfer or card, send and receive instant transfers to other users and bank accounts, make merchant payments at participating businesses, and withdraw funds to bank accounts or through cash-out partners.

Why This License Was Needed

Saudi Arabia does not use EMI or PI frameworks; it operates under national payment licenses issued by SAMA. Without this specific license, the fintech cannot legally operate payment services, hold customer funds, or integrate with national payment infrastructure.

Attempting to operate without proper licensing would result in regulatory enforcement, potential criminal liability, inability to access banking partners and payment rails, and reputational damage that could permanently harm the business.

For fintech companies with international ambitions, licensing strategy represents a critical component of business planning.

Multi-Jurisdiction Approach

Most successful global fintechs pursue a phased, multi-jurisdiction licensing strategy:

Phase 1: Obtain initial license in a favorable jurisdiction (e.g., Lithuania EMI for Europe, MSB registration for US) to establish operations and validate business model.

Phase 2: Leverage passporting or reciprocal recognition where available (e.g., EU passporting from initial EMI license) to expand within regulatory blocs.

Phase 3: Obtain additional national licenses in priority markets where passporting doesn't apply, focusing on largest markets or strategic priorities.

Phase 4: Establish regional hubs with local licenses serving surrounding markets (e.g., Singapore license serving Southeast Asia, UAE license serving Middle East).

Partnership vs. Direct Licensing

Companies must decide whether to obtain direct licenses or partner with licensed entities:

Direct licensing provides maximum control, brand ownership, regulatory independence, and ability to capture full economics, but requires significant capital, compliance resources, and time.

Partnership models (bank partnerships, white-label arrangements, agent relationships) enable faster market entry, lower capital requirements, and reduced compliance burden, but involve shared economics, less control, and dependency on partners.

Many fintechs use hybrid approaches, obtaining direct licenses in core markets while partnering in secondary markets.

Regulatory Arbitrage Considerations

Some fintech companies have historically pursued "regulatory arbitrage"—obtaining licenses in jurisdictions with lighter regulation while serving customers in more strictly regulated markets. This approach has become increasingly risky as regulators coordinate internationally and enforce rules against unlicensed cross-border operations.

Modern best practice emphasizes regulatory compliance in all markets served, even when this requires more extensive licensing efforts.

Understanding global licensing categories—EMI, PI, MSB, and national payment licenses—represents foundational knowledge for any fintech entrepreneur or financial services executive planning to build compliant, scalable operations in 2026. Each licensing framework enables different capabilities, applies to specific geographic markets, and imposes distinct compliance obligations that fundamentally shape business models and operational approaches.

EMI licenses provide the broadest capabilities for digital banking services in EU/UK markets, enabling card issuance, IBAN accounts, and comprehensive financial services. PI licenses offer payment-focused authorization for companies that don't need to issue e-money or hold customer balances long-term. MSB registration governs US/Canadian operations with complex state-by-state requirements and significant compliance burdens. National licenses vary dramatically across other jurisdictions, requiring market-specific research and local expertise.

Successful global fintech companies develop sophisticated licensing strategies that balance regulatory compliance, market access, capital efficiency, and operational control. Whether pursuing direct licensing, partnership models, or hybrid approaches, understanding the capabilities and limitations of each license type enables informed strategic decisions that support sustainable international growth.

As financial services regulation continues evolving globally—with initiatives like EU MiCA for crypto assets, open banking frameworks, and emerging embedded finance regulations—staying informed about licensing requirements and maintaining strong relationships with regulators will remain critical success factors for fintech companies navigating the complex global regulatory landscape.

How long does it take to obtain an EMI or PI license in Europe?

EMI and PI licensing timelines vary by jurisdiction but typically range from 6-18 months from initial application to approval. Lithuania and Ireland tend to have more efficient processes (6-12 months), while Germany and UK may take 12-18 months or longer. Factors affecting timeline include application completeness, regulatory workload, complexity of business model, and responsiveness to regulator questions. Engaging experienced licensing consultants and legal advisors can significantly improve efficiency.

Can I operate in multiple countries with a single license?

Within the EU, EMI and PI licenses benefit from passporting rights, allowing operation across all member states with a single license (though notification procedures are required for each country). Outside the EU, most jurisdictions require separate national licenses. The UK post-Brexit requires separate authorization from EU licenses. Some countries have reciprocal recognition agreements that simplify licensing for companies already authorized in trusted jurisdictions, but these are relatively rare.

What are the capital requirements for different license types?

Capital requirements vary significantly: EMI licenses typically require €350,000 initial capital in most EU jurisdictions, PI licenses require €20,000-€125,000 depending on services offered, MSB state licenses in the US require surety bonds or net worth ranging from $25,000 to $500,000+ per state, and national licenses vary widely from minimal requirements to millions of dollars. Beyond initial capital, ongoing capital adequacy requirements based on transaction volumes and risk profiles may require substantially more capital as the business scales.

Do I need a license to operate a cryptocurrency exchange?

Cryptocurrency licensing requirements vary dramatically by jurisdiction. In the US, crypto exchanges typically register as MSBs and may need state-by-state money transmitter licenses, plus potential securities registration if offering tokens deemed securities. In the EU, the Markets in Crypto-Assets (MiCA) regulation creates a comprehensive licensing framework for crypto service providers. Many countries have introduced specific crypto licenses (e.g., Singapore, Switzerland, Japan), while others prohibit crypto services entirely. The regulatory landscape for cryptocurrency remains in flux, requiring careful legal analysis for each target market.

Can I start operating while my license application is pending?

Generally, no. Most jurisdictions prohibit providing regulated financial services without authorization, regardless of whether an application is pending. Some countries offer regulatory sandboxes that allow limited testing with real customers under relaxed requirements while pursuing full licensing. Some jurisdictions allow "authorized representative" or "agent" arrangements where you operate under another licensed entity's authorization while pursuing your own license. Operating without proper authorization risks regulatory enforcement, criminal liability, inability to obtain licensing later, and reputational damage. Always consult legal counsel before commencing operations.

This article provides general information about fintech licensing categories and should not be considered legal advice, regulatory guidance, or a substitute for professional consultation. Licensing requirements, regulatory frameworks, and compliance obligations vary significantly by jurisdiction and change frequently. The information presented reflects the regulatory landscape as of early 2026 but may not capture recent changes or jurisdiction-specific nuances.