Differences between Electronic Money Institution (EMI) and Payment Institution (PI) licenses
Choosing the Right License for Your Fintech Business in the EU
In the fast-evolving fintech landscape, deciding between an Electronic Money Institution (EMI) and a Payment Institution (PI) license is one of the most important regulatory choices for companies planning to offer payment services across the European Union.
Both licenses allow you to operate under the EU passporting regime, but the differences between them can significantly impact your business model, capital requirements, and growth strategy.
Issuance of Electronic Money
The main distinction between an EMI and a PI lies in the ability to issue electronic money.
Only EMI license holders are authorized to issue and redeem e-money, making this license essential for fintechs that operate digital wallets, prepaid cards, or hold client funds for extended periods.
If your product involves storing customer balances or offering IBAN accounts, an EMI license is the right fit.
Only EMI license holders are authorized to issue and redeem e-money, making this license essential for fintechs that operate digital wallets, prepaid cards, or hold client funds for extended periods.
If your product involves storing customer balances or offering IBAN accounts, an EMI license is the right fit.
Capital Requirements
The minimum initial capital requirements differ substantially:
- EMI: €350,000
- PI: €20,000 to €125,000 (depending on the payment services provided)
Business Flexibility
An EMI license offers greater flexibility - it allows you to provide all services available under a PI license and more.
If your long-term vision includes multi-functional financial products such as e-wallets, IBAN accounts, branded cards, or virtual accounts, an EMI license provides the regulatory scope to support that expansion.
If your long-term vision includes multi-functional financial products such as e-wallets, IBAN accounts, branded cards, or virtual accounts, an EMI license provides the regulatory scope to support that expansion.
Regulatory Complexity
Obtaining a PI license is generally simpler. The process involves a lighter compliance burden and is suitable for businesses that process payments without holding client funds.
In contrast, an EMI license requires stronger governance, internal control systems, and risk management frameworks — but also unlocks broader business opportunities.
In contrast, an EMI license requires stronger governance, internal control systems, and risk management frameworks — but also unlocks broader business opportunities.
Which License Is Right for You?
The right choice depends on several factors:
The right choice depends on several factors:
- Your business model and roadmap
- Planned product functionality
- Readiness to meet regulatory and compliance requirements
If you are exploring your licensing options or planning to expand across the EU, our team is ready to assist.
How We Can Help
At Sviridenko & Partners, we guide fintech companies through the full lifecycle of EMI and PI licensing in Latvia — from regulatory strategy and documentation to post-licensing compliance.
Contacts
Ask a question or describe a situation
+371 67 37 30 20
mail@sviridenko.law