An Electronic Money Institution, or EMI, is a regulated firm authorised to issue electronic money and provide payment accounts, but it is not a bank and does not take deposits or lend in the way a bank does.
General information, not financial, legal, or tax advice. Verify current terms and eligibility with the provider before applying.
What an Electronic Money Institution is
An Electronic Money Institution, commonly shortened to EMI, is a firm authorised by a financial regulator to issue electronic money and to provide payment services such as accounts, cards, and transfers. In the United Kingdom EMIs are authorised and supervised by the Financial Conduct Authority under the Electronic Money Regulations 2011, and many fintech and neobank style providers operate as EMIs or through one. The model exists in the European Union under equivalent rules. Many business accounts marketed by fintech providers are run by an EMI rather than a bank.
How an EMI differs from a bank
An EMI is not a bank. It is focused on payments and the issuing of electronic money. It does not take deposits in the legal sense, and it does not lend out customer funds the way a bank does. Because of that, the funds customers hold with an EMI are generally not covered by a deposit guarantee scheme. In the United Kingdom, bank deposits are protected by the Financial Services Compensation Scheme up to the published limit, whereas money held with an EMI is protected through safeguarding rather than that scheme, as of 9 April 2026.
Safeguarding customer funds
Instead of a deposit guarantee, EMIs must safeguard the money customers hold with them. Under the applicable regulations this means keeping customer funds separate from the firm's own money, typically by placing them in a segregated account at a credit institution or by covering them with an insurance policy or comparable guarantee. The aim is that, if the EMI fails, customer funds are ring fenced and can be returned rather than being available to the firm's general creditors. The exact protection depends on the provider and jurisdiction, so confirm how a given EMI safeguards funds before relying on it. See Safeguarding for the mechanism in detail.
Frequently asked questions
What is an Electronic Money Institution?
Is an EMI a bank?
Is money held with an EMI protected like a bank deposit?
What does safeguarding mean for an EMI?
Definitions, fees, features, and eligibility change and vary by region. This page was last reviewed on 9 April 2026. Confirm current terms with the provider before applying.