What is an EMI?
An EMI, or Electronic Money Institution, is a regulated financial entity authorised to issue electronic money and provide certain payment services. EMIs are common in fintech and digital payments because they can offer wallets, transfers, and account like services without operating as full traditional banks.
What does an EMI do?
An EMI can issue stored value, support domestic and international transfers, provide payment accounts, and facilitate card or account based payments. Many consumer apps and business payment platforms operate under EMI licences in relevant jurisdictions.
How is an EMI different from a bank?
The main difference is that an EMI is usually not permitted to lend in the same way a bank does using customer deposits. EMIs typically safeguard customer funds rather than using them for lending. They are payment institutions first, not deposit taking banks in the traditional sense.
Why are EMIs important in modern payments?
EMIs have helped expand digital financial services by enabling faster product development and more specialised payment solutions. They are especially important in prepaid products, digital wallets, cross border payments, and embedded finance.
Are EMIs regulated?
Yes. EMIs are regulated by financial authorities and must follow rules relating to safeguarding funds, anti money laundering, consumer protection, and operational resilience. The specific rules vary by country, though the basic objective is to protect users and maintain trust in electronic payments.