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How To Choose Electronic Money Institution (EMI)? [Full Guide]

Updated: Jan 9


If you are looking to open an account with Electronic Money Institution (EMI) and wondering how to choose the right one, then keep reading on.

 

Here is a comprehensive guide that will assist you in selecting, analysing, and choosing the best EMI.

 

What Is Electronic Money Institution (EMI)?

 

An Electronic Money Institution (EMI) is a financial entity that has been granted a license to issue electronic money and provide related financial services. Most popular destinations for EMI licensing nowadays are countries like United Kingdom, Lithuania, Malta, Cyprus and France. EMIs leverage technology to facilitate various financial transactions, including payments, transfers, and currency exchanges.


 

What To Check Once Choosing An EMI?

 

There are numerous EMIs nowadays across various jurisdictions, all offering the same thing: multi-currency accounts.

 

However, not all are equally good, and it is crucial to choose wisely since they will be handling your money. To help you in this process, we have compiled a list of tips:

 

Money safeguarding: Inquire about where the EMI is safeguarding client funds (bank name, country, currencies). A reputable EMI will have bank accounts for safeguarding funds at top-tier banks such as Barclays, Citi, HSBC, Goldman Sachs, etc. If it is an unknown bank or in a high-risk country, it is advisable to avoid such a provider. Also, check if client funds are segregated on your EMI's balance sheet.

 

Regulation: It is important to check where the EMI is licensed. If it is in a small, less developed country (for example, Moldova), it implies risk. Also, investigate whether the EMI has ever encountered regulatory issues. For instance, if a particular EMI was fined by the regulator for money laundering or lack of KYC practices, it is recommended to avoid it. Because the next day the EMI might lose a license and your funds will be stuck.

 

Security: Evaluate the overall platform security, authorization tools, and encryption. With an increasing number of fraud cases, even with banks, modern hackers exploit security loopholes to transfer client funds.

 

Exchange rates: Foreign exchange rates and payment fees are crucial considerations. The reason for choosing an EMI over a traditional bank is to save money or have an account in different jurisdiction than the company is registered in. Transaction fees should be transparent, and for better negotiation, provide your current pricing with the bank and request a reduction. For FX fees, check the current spot rate in the market to understand the spread provided to your business. Compare with other providers to identify the most competitive rate on a selected currency pair.

 

If you would like to get a list of most price competitive EMI, reach out to us and we will send you an up to date list.

 

Payments technology: Investigate the technological capabilities of the EMI's payment platform. Pay attention to login security, reporting functionality, and available audit trails. The ability to store beneficiary details is essential to avoid repeated entries. Beneficiary email notifications are another useful functionality, informing payees that a payment has been made to them.

 

Currency Capability: Check the full currency offering of the EMI. Inquire about the list of currencies they can execute payments and exchanges in, as well as hedge. A reputable EMI should support more than 50 currencies.

 

Payments capability: Understand the full list of countries to which the EMI can send payments and the list of currencies the platform can accept payments in. A good EMI will have a wide range of cross-border payment routes and will be able to deliver or receive from at least 50 countries.

 

Testimonials: Request client testimonials, especially from a relevant industry. Any well-established EMI will have satisfied clients who can vouch for their services. Alternatively, you may check reviews on Trustpilot or alternative platform. Please also bear in mind, that there are always dissatisfied customers who leave reviews regardless. If they are not specific and just complaining over some simple things, ignore these type of feedbacks.


How To Find A Good EMI?

 


As mentioned earlier, there a plenty of EMI’s. But we suggest to look in the most regulated and banked countries such as UK, Germany, Netherlands, Australia, Hong Kong, Singapore, etc.

 

To save your time, we can recommend you payment providers that can fit your business needs. Do not hesitate to reach out to us and we will send an up to date list.

 

We have helped hundreds of companies worldwide to find the best payment and FX options based on their business operations specifics and payment destinations.

 

Usual payments partner that we work with is able to:

 

·      Provide single multi-currency IBAN for all payments and FX.

·      Allows to receive payments in 30+ different currencies

·      Allows to send payments in 50+ currencies to 120+ countries

·      Allows to make mass-payments by integrating via API or uploading an excel spreadsheet

·      Gives access to effective currency hedges

·      Supports exchange of currencies using reasonable and competitive pricing

·      Process automation via API integration

·      Provides cost-effective solution for low value international payments

·      Supports payment control and audit trails

·      Streamlines beneficiary management and compliance processes

·      Gives a relationship manager ready to help finding best solution and answer your questions

 

 

Should You Keep Your Money With An EMI For A Longer Period Of Time?

 


Unlike with the bank, your money with EMI is not insured. Although EMIs are required to safeguard client funds with a licensed bank overnight, this safeguarding is not entirely equivalent to the insurance that banks provide.

 

Certainly, a highly reputable EMI will secure client funds with a Top Tier Bank. Nevertheless, it is crucial to inquire before opening an account. Our EMI partners ensure the safety of client funds with banks such as JP Morgan, Goldman Sachs, Barclays, Citi, Lloyds, and similar institutions.

 

We recommend using an Electronic Money Institution only for the intended services, such as foreign exchange or cross-border payments. This implies pre-funding the account with the EMI to facilitate currency exchange or international payments. It is not advisable to keep money for an extended period with an EMI unless it has an excellent reputation.

 


Conclusion

 

In conclusion, we have addressed the key factors to contemplate before selecting an EMI (Electronic Money Institution). We trust that this guide will assist you in your decision-making process!

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