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What's an EMI, and why are they changing the world?

Updated: Feb 3, 2022

Banking is dead. And gone are the days of taking gold coins to market in a leather sack.

When central banks scrapped the Gold Standard decades back, they sent a signal that the currency was now fluid. Politicians quickly learned that the ability to "create" money helped win votes. As such, it was always unlikely they would ever return to a physical asset, that they couldn't create, as a means of regulating their economies.

This remained the status quo for the best part of a century and, arguably, massive and unsustainable government debt was the result.

Eventually the very printing of the paper that passed for wealth became cumbersome. Surely then it was better for politicians to create an infrastructure whereby "digital dollars" were created and distributed. Save all that ink you see. Environmentally friendly even.

Enter the modern banking system. Debit cards and automatic payments giving access to "wealth" held on account at banks that (theoretically) held paper from the government to equal the one's and zero's in their ledgers.

In doing so though banks, and governments, have made themselves a little redundant. We'd become so used to accepting one's and zero's as payment that when Bitcoin was created as the first limited capacity digital currency in 2009, it gained rapid popularity. Some would argue, it's never looked back. At the time of publication just one of those little Bitcoins was considered by the public to be worth around $50,000 US Dollars! Man, that backfired.

Suddenly we didn't need a government to issue gold coins, or paper notes we didn't need large buildings to hold that paper, or to charge us fees to deposit or withdraw it.

The age of the EMI (electronic money institution) was born and the ability to create digital dollars wasn't limited to finance ministers.

Since then, digital currency has significantly changed how society views money and how it conducts commerce.

The development of Bitcoin, Ethereum, Solana and thousands of other cryptocurrencies, that exist only in electronic form, has now even prompted central banks to evaluate Electronic Money (e-money) as a new means of regulating trade.

Some jurisdictions are exploring the full replacement for their traditional currency and countries such as El Salvador now accept BTC (Bitcoin) as legal tender to capitalise on its popularity.

"So how did we get here, and how real is it?"

E-money or Electronic Money is the digitisation of currency (cash). It's been one of the most significant game-changers in the financial industry since it began as a concept in the 1980s and rose to prominence during the Dot-Com era.

From 2014 to 2018, the number of electronic money transactions in Europe alone doubled to more than four billion.

"So, what exactly is E-money?"

Global Investor Reveals What exactly is e-money? A detailed study on electronic money.
Global Investor Reveals What exactly is e-money?

Electronic money is similar to "virtual currency" that is only available within one Electronic Money Institution.

Electronic money (e-money) is broadly defined as an electronic monetary value store on a technical device that can be widely used to make payments to entities other than the e-money issuer.

E-money, as part of the new electronic payment system (a substitute for traditional payment), raises the possibility of further developing banking functions in the global networked economy. The device functions as a prepaid bearer instrument and has an advantage of conducting transactions on its own without using a bank account.

The Fintech, (a combination of the words "finance" and "technology,") industry is a thriving market. It's now how we buy pizza, pay tax or issue library books. There are 500 million consumers and 20 million businesses in Europe.

Now, when we say "online banks", we're usually talking E-money Institutions (EMI), whether we know it or not.

People are eager to explore alternatives to traditional banking. They are simple to use, and the best companies in the space have excellent mobile apps with competitive pricing. From a business perspective, the industry has enormous potential. However, given the number of companies that have entered the market in recent years, it is critical to have a clear value proposition and client segment in mind while trying to launch into the competition. Due to licencing requirements, there is a barrier to entry, and so it's considered a bit challenging now to enter the market without serious backing and a solid depth of knowledge.

"What's the difference between Electronic Money and Other Digital Currencies?"

E-currency is defined as electronic money, which is represented by digital values stored and transferred online. However, those two terms cannot be used interchangeably; The term "e-currency" also refers to cryptocurrencies, and virtual currencies such as video game monetisation currencies. All of these distinct varieties of digital currency have characteristics and applications that set them apart from e-money.

PayPal, for example, is an e-money institution, and transactions with PayPal are conducted using e-money. Furthermore, TransferWise (Now Wise), Monese, Revolut and Stripe are licenced as e-money institutions in the United Kingdom.

As an e-money institution, you can use an electronic unit of value, allowing faster monetary transactions than payment institutions that deal with, say, the Single Euro Payments Area (SEPA).

E-Money vs Cryptocurrencies


Global Investor Reveals the Difference Between E-money and Cryptocurrency.
Global Investor Reveals the Difference Between E-money and Cryptocurrency.

Cryptocurrencies are similar to electronic money and have a value that fluctuates with the market's ebb and flow. A growing number of businesses now accept them as payment for their goods and services.

However, that's where the parallels end. Cryptocurrencies, unlike electronic money, are not governed by a centralised authority (which can hold great appeal to many "alternate thinkers").

In "traditional" electronic money transactions, a financial institution is an intermediary and supervises the transaction. Anti-money laundering, anti-fraud, and know-your-customer regulations must be followed by e-money institutions or face legal consequences. As a relatively new technology, cryptocurrencies are not yet widely regulated.

Cryptocurrency transactions are validated and processed by a decentralised complex peer system. Furthermore, traditional cryptocurrencies are not backed by fiat currency. In contrast to e-money, whose value fluctuates in relation to the value of the assigned fiat currency. The value of cryptocurrency fluctuates due to supply, demand, and market developments in the cryptocurrency market.

E-Money vs Virtual Currencies

Virtual currencies are more stable in terms of value than many cryptocurrencies. Instead of governments, private companies serve as issuers in this case. They can only be spent on content found within the company's environment, such as with gaming.

A glance at the European Commission's definition will shed some light on the situation. According to their regulation, virtual currencies are a type of unregulated digital money issued and usually controlled by its developers and used and accepted by members of a specific virtual community.

Electronic money institutions are classified into three types.

  • Electronic Money Institutions: Businesses that have been granted authorisation by organisations like De Nederlandsche Bank (DNB) or SatchelPay to issue electronic money. There are currently 513 electronic money institutions (EMIs) operating in Europe. Wise Payments Limited is a multinational cross-border payments electronic money institution. New EMIs, such as SatchelPay, provide businesses with improved payment processing technology, industry-level security, and managerial convenience more than any financial institution.


  • Exempt Electronic Money Institutions: An exempted electronic money institution may not begin issuing electronic money until the DNB has entered the enterprise in the public register as an exempted electronic money institution.

  • Banks: Enterprises that may act as electronic money institutions based on their authorisation to conduct business as a bank, to the extent permitted by the authority granted. They are exempt from the requirement for electronic money institutions to be authorised.

With the creation of a new monetary landscape, e-money offers several advantages, including the ability to move money quickly, literally at the speed of light.

  • Better record keeping.

  • Money transfers around the world.

  • The ability to transport large sums of money without being physically burdened.

The Benefits of Electronic Money

E-money has dramatically diminished the role of cash in our digital age; in some countries, it may even replace it entirely at some point in the future. The reason for this shift is due to the numerous advantages that e-money has for businesses, financial institutions, and customers alike. Electronic money provides several benefits to the global economy, including.

Increased flexibility and convenience

The use of electronic money adds flexibility and convenience to the transaction. With the click of a button, transactions can be entered from anywhere in the world at anytime. This eliminates the inconvenient and time-consuming process of physically delivering payments.

Documentary evidence

Electronic money is becoming increasingly popular because it keeps a digital historical record of every transaction. It facilitates payment tracing and also aids in the preparation of detailed expenditure reports, budgeting, and other tasks.

Avoids fraudulent behaviour

Since electronic money provides a detailed historical record of all transactions, it is easy to track transactions and trace them back through the economy. It improves security and aids in the prevention of fraudulent activities and malpractice.

Enhanced security

The use of e-money also increases one's sense of security. Advanced security measures such as authentication and verification are used to prevent the loss of personal information while transacting online. To ensure the transaction's complete authenticity, stringent verification measures are also used.

The impact of Fintech on payment and e-money institutions is massive. Global payments revenues increased by 11% between 2016 and 2017, owing to a decline in cash use and an increase in mobile phone use. The increased use of digital wallets, which the European Banking Authority (EBA) estimates have added around 29 BILLION GBP to global payments revenues, has been a critical feature of payments growth.

There were 198 authorised E-money Institutions and 32 Small E-money Institutions in the UK as of September 28, 2020. - psplab. This is the highest number of jurisdictions in the EAA. The data is not surprising given that the UK is the leading hub for payment companies and one of the best places in the world to operate a company with an e-money licence.

The following are just a few reasons why the United Kingdom should be considered by any company interested in providing e-money and payment services.

E-money is one of the most recent payment instruments, and it is gradually making its way to widespread adoption.

What exactly is an E-Money License? What is the significance of those?

As previously stated, electronic money is regulated by financial authorities and is backed by fiat money. As a result, most electronic money issuing falls under the purview of businesses, as opposed to banks, which may issue e-money as part of their full banking licence.

Upon receiving an E-Money license, a company becomes an authorised E-Money Institution and can start developing services related to E-Money and to execute transactions.

E-money Institutions



Electronic money payment instruments (such as payment cards or hardware e-wallets) are available via E-money institutions. EMIs can keep electronic money for as long as needed. Customers with EMIs can withdraw their electronic money, convert it to cash, or transfer it to other bank accounts.

However, the regulatory body of the European Commission demands that e-money institutions have an amount equal to the issued e-money on deposit as opposed to banking institutions, which could place a significant part of their customer's money to work. E-money licenses are essential for any business model that involves the processing of electronic money. They provide a substantial opportunity for unbanked individuals to achieve financial independence. As a result, e-money licences are in high demand in many countries.

E-money is also becoming more prevalent in developed nations. For instance, in Sweden, they plan to introduce a digital version of the krona (E-krona), which is the country's national currency.

Getting Started with E-Money

It's highly likely you already have.


Electronic money has become a payment and finance industry staple, particularly in countries with vibrant fintech markets such as China, Estonia or Singapore. E-money is convenient, secure, and has a fast transaction speed. Perhaps most importantly though, it's simple to use.

I love hearing about innovation around e-money and passing it on to our investment network, so if you're developing something to revolutionise the industry further - get in touch with me here directly.

If not, but you found the above helpful, and want to keep an eye on this space, don't forget to subscribe here to receive updates and follow me on Twitter for more insights.


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