What is an EMI?
An Electronic Money Institution (EMI) is a regulated entity authorized to issue electronic money and payment accounts. EMIs offer fast onboarding (often fully remote), competitive FX rates, modern APIs, and lower monthly fees than traditional banks. However, they cannot lend money, and client funds are not covered by deposit guarantee schemes.
What is a licensed bank?
A licensed bank can accept deposits (protected up to €100K in the EU), offer credit and lending products, and provide the full range of financial services. Banks typically have more rigorous onboarding requirements, higher minimum balance requirements, and less flexible pricing — but offer greater security and access to credit.
When to choose an EMI
Choose an EMI if: you need fast, remote onboarding; you have international payment flows and need competitive FX rates; you're a startup or early-stage company without a long banking history; you need modern API access and integrations; your transaction volumes are moderate and you don't need credit facilities.
When to choose a bank
Choose a bank if: you need deposit protection for large cash balances; you require credit facilities, overdrafts, or business loans; you're in a regulated industry that requires a banking relationship; your clients or partners require you to hold funds at a licensed bank; you have very high transaction volumes that require dedicated banking infrastructure.
Frequently asked questions
Is my money safe with an EMI?
Yes, regulated EMIs are required to safeguard client funds in segregated accounts at licensed banks. This means your money is protected even if the EMI becomes insolvent. However, unlike bank deposits, EMI funds are not covered by deposit guarantee schemes (up to €100K in the EU).
Can an EMI replace a bank account?
For many businesses, yes. EMIs can handle day-to-day payments, international transfers, multi-currency management, and card issuance. However, if you need credit facilities, large deposit protection, or a traditional banking relationship for regulatory purposes, a bank account remains necessary.
Do EMIs have SWIFT access?
Some EMIs offer SWIFT access for international wire transfers, but many rely on SEPA (within Europe) and local payment rails. If you regularly send or receive USD wires or payments outside SEPA, check whether the EMI offers SWIFT connectivity.
