When comparing the licenses of a Payment Institution (PI) and an Electronic Money Institution (EMI), it’s important to understand the regulatory frameworks and specific operational permissions associated with each. The following table provides a detailed comparison:
| Feature | Payment Institution License | Electronic Money Institution License |
|---|---|---|
| Primary Authorization | Authorized to provide payment services like money transfers, direct debits, and card payments. | Authorized to issue and manage electronic money, in addition to providing payment services. |
| Regulatory Framework | Typically regulated under Payment Services Directives (PSD/PSD2 in the European Union). | Regulated under Electronic Money Directives (EMD) in the European Union. |
| Capital Requirements | Generally lower initial capital requirements compared to EMIs. | Higher initial capital requirements to ensure the stability and security of the electronic money issued. |
| Scope of Services | Limited to facilitating payment transactions without issuing electronic money. | Can issue electronic money, which can be used for storage, transfer, or payment purposes, in addition to standard payment services. |
| Consumer Protection | Requirements focus on the security and efficiency of payment transactions. | Additional requirements for safeguarding and redeeming electronic money, ensuring consumer protection. |
| Compliance and Oversight | Must adhere to AML (Anti-Money Laundering), KYC (Know Your Customer), and other financial regulations. | Along with AML and KYC, must comply with regulations specific to the issuance and management of electronic money. |
| Operational Complexity | Less complex in terms of regulatory compliance compared to EMIs. | More complex, given the additional layer of issuing and managing electronic money. |
| Market Access | Access to payment service markets without the ability to create electronic money. | Access to both payment service markets and electronic money markets, offering a broader scope of financial services. |
| Licensing Process | Generally a simpler and quicker process than EMI licensing. | More stringent and comprehensive, involving closer scrutiny of business models, risk management, and operational readiness. |