A small electronic money institution (small EMI) is a UK company the Financial Conduct Authority (FCA) has registered, rather than authorised, to issue electronic money within size limits. E-money is stored monetary value, issued when a customer pays in funds and accepted as payment by others: a prepaid card balance or a wallet balance in an app. The registration comes from regulation 13 of the Electronic Money Regulations 2011 (EMRs).
The small EMI route exists so that firms with modest volumes can issue e-money without the €350,000 initial capital and full authorisation an authorised EMI needs. The FCA applies the same standards of governance, fitness and propriety, safeguarding and money laundering controls to both.
| Feature | Small EMI | Authorised EMI |
|---|---|---|
| Status | Registration | Authorisation |
| Application fee | £1,130 | £5,640 |
| Initial capital | None until €500,000 average outstanding e-money, then 2% of that average | €350,000 |
| Outstanding e-money limit | €5m average | No limit |
| Unrelated payment services | Up to a €3m monthly average | No limit |
| Account information and payment initiation | Not permitted | Permitted |
| FCA periodic fee 2026/27 | £1,432 flat | From £2,063 |
The full authorisation route is set out in our UK EMI licence guide.
A small payment institution (SPI) provides payment services only, up to a €3m monthly average of payment transactions, and cannot hold stored balances. A small EMI can issue e-money and hold customer balances, and can also provide payment services up to the same €3m monthly average. Our SPI registration guide covers that route.
Apply for full authorisation from the outset if the business plan shows average outstanding e-money passing €5m within two to three years, if you need account information or payment initiation services, or if bank and card scheme partners require an authorised licence. Moving up later is a new application with its own fee and timeline, not a variation of the registration. Our comparison of API, SPI, RAISP and EMI licences sets the routes side by side.
Average outstanding e-money must not exceed €5m. The EMRs define this as the average of the e-money in issue at the end of each calendar day over the preceding six calendar months, calculated on the first day of each month. A new firm uses the projected figure from its business plan.
Yes. Payment services not linked to issuing e-money must not exceed a monthly average of €3m, measured over the previous 12 months or, for a new firm, projected over its first 12 months. There is no separate cap on total turnover beyond these two limits.
A small EMI is a UK registration and gives no right to operate in another country. UK firms lost EU passporting rights on 31 December 2020, so serving customers in the European Economic Area needs a separate entity authorised in an EU member state. For other countries, the local law decides whether a licence is needed there.
Regulation 13 of the EMRs sets the conditions. The FCA registers a firm that:
The directors and the people managing the e-money business, including the compliance officer and the money laundering reporting officer (MLRO), are registered through the FCA's individuals form. Anyone holding 10% or more of the shares or voting rights, or with significant influence, is assessed as a controller. The FCA expects the people running the business to do so from the UK.
Yes. A small EMI is subject to the Money Laundering Regulations 2017 in full: a business-wide risk assessment, customer due diligence, ongoing monitoring, sanctions screening and suspicious activity reporting, overseen by the MLRO.
None while average outstanding e-money stays below €500,000. Once it reaches €500,000, the firm must hold capital of at least 2% of its average outstanding e-money (EMRs Schedule 2, paragraph 3). At the €5m ceiling that is €100,000. The business plan must also show enough funding to cover running costs through the forecast period.
| Average outstanding e-money | Capital required at 2% |
|---|---|
| Below €500,000 | None |
| €1m | €20,000 |
| €2.5m | €50,000 |
| €5m | €100,000 |
The 2026/27 rates are the FCA's final figures in PS26/14, published on 2 July 2026. Our guide to FCA PI and EMI licence costs sets out the full budget.
Yes, and it must safeguard them. Funds received for e-money are kept apart from the firm's own money, in a designated safeguarding account at a bank or covered by an insurance policy or comparable guarantee, so that customers are repaid in full if the firm becomes insolvent.
Yes. The FCA's CASS 15 safeguarding rules, introduced by PS25/12, came into force on 7 May 2026 and apply to small EMIs. They require daily reconciliation, a monthly safeguarding return to the FCA, a resolution pack and an annual safeguarding audit. A firm that has not been required to safeguard more than £100,000 at any time over a period of at least 53 weeks is exempt from the annual audit.
Our article on the CASS 15 safeguarding regime explains each obligation. Safeheld, the firm's own safeguarding platform, runs the daily reconciliation and prepares the monthly return.
The application is made on the FCA's small EMI form through Connect. The FCA expects every policy to be written for the applicant's own business, and it returns a submission without assessing it if the minimum information or the correct fee is missing.
The FCA must decide a complete application within three months and any application within twelve months. It allocates a case officer within a maximum of 20 working days of submission. The firm plans small EMI registrations at a few months from submission, shorter than the 6 to 8 months it plans for full EMI authorisation, when the file is complete and the safeguarding bank is named.
| Stage | Typical duration |
|---|---|
| Case officer allocation | Up to 20 working days |
| Statutory deadline, complete application | 3 months |
| Statutory deadline, any application | 12 months |
The application names the safeguarding bank and describes the operating account, so banking conversations start before submission. Banks run their own due diligence on e-money firms, and a clear business plan, named MLRO and written safeguarding procedure make that review faster.
Most small EMIs issue cards through a principal member of Visa or Mastercard, known as a BIN sponsor, or through a white-label card platform. The partner's pricing and minimum volumes shape the economics of the programme, so the business plan models them at the rates actually quoted.
Yes. A small EMI may use a trading name and serve customers through a mobile app or website, provided customers can see the registered entity behind the brand and the firm meets the security and strong customer authentication requirements of the Payment Services Regulations 2017.
A small EMI submits periodic regulatory returns on its e-money, payment volumes and capital, the monthly safeguarding return, fraud data and complaints data. The FCA's new complaints reporting rules (PS25/19) apply from the reporting period 1 January to 30 June 2027.
Yes. The Consumer Duty applies to services for retail customers, including those in vulnerable circumstances. Financial promotions must be fair, clear and not misleading. Outsourcing is permitted, but the small EMI stays responsible for every outsourced function and oversees it under a written contract.
Yes. The buyer must obtain FCA approval for the change in control before completion, and the FCA assesses the buyer's fitness and propriety and the source of the funds.
A small EMI that expects to pass the €5m or €3m limits applies for authorisation as an authorised EMI. It is a new application, with the £5,640 fee, €350,000 initial capital and a full assessment, so firms plan the move well before reaching the limits. The FCA expects the business plan in the original registration to show how the firm will manage growth.
Details of the authorised route and the service are on our UK EMI licence page.
Average outstanding e-money must not exceed €5m, and payment services not linked to e-money must not exceed a €3m monthly average.
The FCA application fee is £1,130. The 2026/27 annual periodic fee is a flat £1,432, plus the Financial Ombudsman Service general levy.
Not below €500,000 of average outstanding e-money. From that level it must hold at least 2% of its average outstanding e-money.
No. UK firms lost EU passporting rights on 31 December 2020, so EEA customers are served through a separate EU-authorised entity.
Yes. It can issue prepaid and debit cards through a card scheme member, subject to the scheme's rules and the €5m e-money limit.
The FCA must decide a complete application within 3 months and any application within 12 months. The firm plans small EMI registrations at a few months from submission.
Yes, by making a new application for authorisation with the £5,640 fee and €350,000 initial capital. It is not a variation of the existing registration.
Buckingham Capital Consulting has obtained FCA e-money and payment licences for firms including Dzing Finance, Hryze and Onpoint Money since 2013, and arranges the safeguarding account alongside the application. The firm advises on the choice between small EMI registration and full authorisation, prepares the application, and plans the move to authorised EMI as volumes grow.
Speak to an expert: WhatsApp +44 7563 115980, Telegram @buckinghamcapital or info@buckinghamcapitalconsulting.co.uk.
This article is general information, reviewed against the regulator’s published requirements on the date shown. It is not legal advice; the regulator’s current publications take precedence.