In the modern world, electronic payments have become an integral part of our lives. For companies working in this field, licenses play a key role, as they allow not only to conduct legal activities, but also protect the interests of customers.
What are EMI and PSP licenses?
EMI licenses are licenses that are issued to financial institutions working in the field of electronic money (Electronic Money Institutions). Such companies provide customers with the opportunity to store funds in virtual accounts, issue electronic money and even offer services similar to banking. EMI licenses are most often obtained by organizations that want to work in the international market, providing universal payment solutions.
PSP (Payment Service Providers) licenses, on the other hand, are suitable for companies that specialize in payment processing. These can be aggregators that help businesses accept payments via cards, e-wallets and other methods. PSP licenses do not allow the issuance of electronic money, but give access to technologies that facilitate the transaction process.
Why do I need different types of licenses?
The differences in licenses depend on the tasks and scale of the business. In some cases, basic solutions are sufficient, while in others advanced functionality is required. The main objectives of the licenses include:
- Ensuring security. Licenses protect customers from fraud and ensure transparency of transactions.
- Compliance with the law. Without licenses, any financial activity is considered illegal.
- Increase customer trust. It is important for users to know that the company operates within the law and their money is safe.
The main types of payment licenses
To better understand which license to choose, it is important to understand their key types. The main ones are:
- EMI license (Electronic Money Institution). As mentioned above, it is suitable for companies that issue electronic money. With its help, you can offer virtual account services, debit cards and other products to customers.
- PSP license (Payment Service Provider). The main purpose is transaction processing. It is popular among startups who want to focus on online payments.
- PI license (Payment Institution). This is an intermediate option between EMI and PSP. The PI license allows you to make transfers, accept payments and provide limited financial services, but does not give you the right to issue electronic money.
- Cryptocurrency license. With the growing popularity of cryptocurrencies, more and more companies are getting licenses allowing them to trade and store digital assets. Such licenses regulate the operation of exchanges, wallets and services related to cryptocurrencies.
How do I choose a suitable license?
The choice of a license depends on several factors:
- The type of business. If you plan to offer comprehensive payment solutions, an EMI license is suitable for you. For small startups focused on online payments, it’s better to start with PSP.
- The geography of the work. The license must meet the requirements of the country where you plan to do business.
- Budget. Obtaining a license can be an expensive process, especially when it comes to international permits.
What to consider when obtaining a license?
The process of obtaining a license consists of several stages, including submission of documents, confirmation of compliance with requirements and registration. It is important to understand that regulators in different countries have different requirements. For example, some require minimal capital to start, while others focus on the data security system.
Regardless of the type of license you choose, the key aspect is the reliability and transparency of the company. Regulators strive to minimize risks for consumers, so it is important to comply with all established standards.
Payment licenses such as EMI, PSP and others play a crucial role in the development of financial technologies. They allow companies to provide convenient and secure services to customers, while complying with laws and regulations.