Firms that issue e-money must be registered or authorised with us under the Electronic Money Regulations 2011.
Electronic money institutions (EMIs) must operate under certain conduct of business requirements, reporting and notification requirements, and online security requirements. In particular these firms must:
- be registered or authorised with the FCA, unless they are exempt from the Electronic Money Regulations 2011 (EMRs)
- comply with rules about issuing, distributing and redeeming electronic money (e-money) set out in the EMRs, the Payment Services Regulations (PSRs) and parts of the FCA Handbook
- meet the conduct of business requirements of the EMRs
- give us annual ‘reporting information’ so we can supervise your business, for example your income statement
- keep us informed of any change of circumstances in your firm, for example changes in ownership of the EMI or if you want to vary the services you provide, and
- ensure that your customers’ online payments are secure and safe
E-money is electronically (and/or magnetically) stored monetary value that is issued on payment of funds for transacting payments with someone other than the issuer. Examples include pre-paid cards and electronic pre-paid accounts for use online, such as an e-voucher.
Registration and authorisation
Firms that need to be registered or authorised
EMIs must be either registered or authorised by us before they start issuing, distributing or redeeming e-money (unless otherwise exempt).
They can provide payment services without having to be separately registered or authorised under the PSRs.
Firms that don’t need to be registered or authorised
Credit institutions, credit unions and municipal banks don’t require registration or authorisation under the EMRs.
If they want to issue e-money, they must have Part 4A permission under the Financial Services and Markets Act 2000.
When issuing e-money, they’re subject to the provisions in the EMRs on issuing and redeeming e-money.
Firms that need to be registered
If you expect your business will not exceed an average of €5m outstanding e-money, you may wish to apply to register as a small EMI.
You can also provide payment services but only if the average monthly turnover does not exceed €3m (unrelated payment services).
Firms that need to be authorised
You can apply to become an authorised EMI:
- if your firm does not qualify as a small EMI, for example if the expected average outstanding e-money will exceed €5m
- if you want to issue e-money in other European Economic Area (EEA) member states
Your firm can also provide other payment services not related to e-money (unrelated payment services).
What we need from you for registration or authorisation
When you apply for registration or for authorisation, you must complete and submit the relevant application forms and accompanying documents. This includes but is not limited to:
- what e-money services and payment services you want to provide, set out in a business plan
- who’ll be responsible for providing the services, for example a manager or an agent on your behalf
- details of any person or firm with 10% or more of the capital or voting rights in your firm, and
- if you want to operate in other EEA states
Conduct of business requirements under the EMRs
The EMRs set out the obligations that apply to EMIs as you conduct e-money business. They relate to the issuing and redeeming of e-money and the prohibition on paying interest or other benefits linked to the length of time that e-money is held.
For more information, see Chapter 8 of our approach document.
Reporting requirements for authorised or registered EMIs
Authorised and small EMIs must:
- provide regular ‘reporting information’ to comply with our supervisory and EU reporting obligations
- send ‘notifications’ when there is a significant change in the firm’s circumstances. We expect you to provide details of any change within 28 days
Changes of circumstances
We need accurate information to monitor your EMI business. It is important that you tell us using the appropriate form if you make changes to your business, such as:
- changing your business details (DOC), for example your registered name, trading name or contact details
- changing your legal status
- making a change in qualifying holding
- changing the people responsible for issuing e-money or your agents
- changing the types of e-money or payment services you provide (in which case you must notify us by email: email@example.com)
- ceasing to provide e-money services, in which case you must cancel your registration or authorisation, and
- in the case of a small EMI, if it no longer fulfils the conditions of registration - for example if the average outstanding e-money exceeds €5m - it must apply to become an authorised EMI within 30 days of the change in circumstance
Contact us to make any notification that is not covered here.
Chapter 4 of our approach document gives more information on the changes in circumstances of registration and authorisation that a firm must tell us.
Security of internet payments
The European Banking Authority (EBA) has published its final Guidelines on the security of internet payments. We fully support the objectives behind the guidelines and the principle that consumers should be protected against fraud when making payments online. Ensuring the security of payments and the protection of sensitive customer data is a critical part of the infrastructure of robust payment systems.
Many firms already have strong customer authentication measures in place, and we remind payment service providers of their responsibility to ensure consumers’ payments are safe and secure. We will incorporate the requirements of the guidelines into our supervisory framework in line with the Payment Services Directive II transposition timeline.
You can contact us by:
- phone on 0300 500 0597
- email on firstname.lastname@example.org
- post: Financial Conduct Authority, 25 The North Colonnade, London E14 5HS
If you are a firm we already regulate, you can submit some applications and notifications online.
More information on registering and authorising EMIs can be found in Chapter 3 of 'The FCA’s role under the Electronic Money Regulations 2011: Our approach'