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Regulatory regime guide

Payments and e-money: PI, EMI and PSD2

Payment institution and electronic money institution authorisation under PSD2 and the E-Money Directive, the scope exclusions that come first, and exactly how far the proposed PSD3 and Payment Services Regulation have actually got.

Scope
European Union and EEA. Verify against current national requirements.

Direct answer

If your business executes payment services or issues electronic money, you generally need an authorisation: a Payment Institution (PI) under PSD2 for payment services, or an Electronic Money Institution (EMI) where electronic money is issued.1015 Check the exclusions before the authorisation question. PSD2 excludes a list of activities from its scope entirely, and the E-Money Directive excludes certain monetary value from the definition of electronic money, so an activity that moves money is not always a payment service.1113 A Member State may also exempt small payment institutions and small electronic money issuers from full authorisation, under conditions and subject to registration, but an exempted undertaking does not gain the right to operate in other Member States.1213 Within scope, which authorisation applies is decided by the payment services listed in Annex I to PSD2 and by whether electronic money is issued, not by how the product is marketed.1015 Authorisation is granted only to a legal person established in a Member State, and an authorised institution can then operate in other Member States through its home authority.68 Plan against PSD2 and the E-Money Directive. PSD3 and the Payment Services Regulation began as European Commission proposals of 28 June 2023; Parliament and Council reached a provisional agreement on 27 November 2025, the Parliament economic and monetary affairs committee approved the negotiated text on 5 May 2026, and the European Parliament record updated on 20 June 2026 classifies the file as close to adoption. As at 22 August 2026 formal adoption by Parliament and Council was still pending, so neither instrument was applicable law.16

Who this applies to

  • Fintechs offering wallets, cards, IBANs or stored value
  • Payment processors and payment facilitators
  • Marketplaces holding or routing customer funds
  • Non-EU payment companies that need an established EU entity to serve the EEA6

Regulated activities

  • Issuing electronic money and prepaid wallets (EMI)1015
  • Executing payment transactions and money remittance (PI)1015
  • Payment initiation services, and account information services on a lighter registration9
  • Issuing and acquiring payment instruments1015

Routes to market

Own EMI or PI authorisation

Full control and the ability to operate across the EEA, with higher capital, substance and evidence expectations. The applicant must be a legal person established in a Member State.68

Agent of an authorised institution

A payment institution may provide payment services through agents it registers with its home authority, and it stays responsible for what they do. The arrangement does not authorise the agent to provide payment services on its own account, so it is a route to market, not a licence.7

Acquisition

Acquire an already authorised PI or EMI to compress time to market, subject to change-of-control and qualifying-holding approval.

Capital and substance

  • PI initial capital: EUR 20 000 for money remittance only, EUR 50 000 for payment initiation, EUR 125 000 for the payment services in points 1 to 5 of Annex I.4
  • An account information service provider only is registered rather than authorised, holds no initial capital, and instead carries professional indemnity insurance or a comparable guarantee.9
  • EMI initial capital: at least EUR 350 000.14
  • A small payment institution or small electronic money issuer exempted by its Member State is registered instead, on national conditions and without cross-border rights.1213
  • Own funds, and safeguarding of funds received from users, are supervised on an ongoing basis.515
  • The applicant is a legal person established in a Member State, with local management substance and outsourcing governance.12617

Authorisation stages

  1. 1

    Exclusions and perimeter

    Check the PSD2 scope exclusions and the E-Money Directive definition first, then confirm which Annex I payment services you perform and whether electronic money is issued.10111315

  2. 2

    Pre-application

    Draft the programme of operations, capital, safeguarding, governance and the security policy document.3

  3. 3

    Submission and Q&A

    File with the national competent authority and manage supervisory questions.

  4. 4

    Authorisation and launch

    Complete conditions, safeguarding accounts and operational readiness.

Where applications commonly fail

  • Applying for an authorisation the scope exclusions meant you never needed1113
  • Underestimating safeguarding and reconciliation requirements515
  • Treating an agency arrangement as though it authorised the agent7
  • Insufficient EU management substance and local presence1217
  • Weak AML and counter-terrorist-financing business-wide risk assessment
  • Choosing EMI or PI incorrectly for the actual product1015
  • Planning against PSD3 or the Payment Services Regulation as though they were already applicable law, when formal adoption was still pending as at 22 August 202616

Frequently asked questions

An EMI can issue electronic money and hold stored value in wallets; a PI can execute payment services but cannot issue electronic money. The deciding question is whether your product issues electronic money as defined in the E-Money Directive, alongside which of the Annex I payment services you perform.

Primary sources for this page

17 citations, each to the article or section the statement rests on. The numbers beside a statement point to the citation behind it. Always confirm against the current official text.

  1. 1Article 59, authorisation of crypto-asset service providersRegulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assetsEuropean Parliament and Council of the European Union
  2. 2Article 8 and Article 13, authorisation of credit institutions and the location of the head officeDirective 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutionsEuropean Parliament and Council of the European Union
  3. 3Article 5(1), the contents of an application for authorisation as a payment institution, including point (j), the security policy documentDirective (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal marketEuropean Parliament and Council of the European Union
  4. 4Article 7, initial capital, points (a), (b) and (c)Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal marketEuropean Parliament and Council of the European Union
  5. 5Article 10, safeguarding requirements for funds received from payment service usersDirective (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal marketEuropean Parliament and Council of the European Union
  6. 6Article 11, granting of authorisation, including the requirement that authorisation be granted only to a legal person established in a Member StateDirective (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal marketEuropean Parliament and Council of the European Union
  7. 7Article 19, use of agents, branches or entities to which activities are outsourcedDirective (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal marketEuropean Parliament and Council of the European Union
  8. 8Article 28, application for the exercise of the right of establishment and the freedom to provide servicesDirective (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal marketEuropean Parliament and Council of the European Union
  9. 9Article 33, account information service providers, registration and professional indemnity insuranceDirective (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal marketEuropean Parliament and Council of the European Union
  10. 10Annex I, the list of payment servicesDirective (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal marketEuropean Parliament and Council of the European Union
  11. 11Article 3, activities excluded from the scope of the DirectiveDirective (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal marketEuropean Parliament and Council of the European Union
  12. 12Article 32, optional exemption for small payment institutions, and Article 32(4) on the absence of passporting rights for exempted undertakingsDirective (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal marketEuropean Parliament and Council of the European Union
  13. 13Article 1(4) and (5), monetary value excluded from the definition of electronic money, and Article 9, optional exemptions for small electronic money issuersDirective 2009/110/EC of the European Parliament and of the Council of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutionsEuropean Parliament and Council of the European Union
  14. 14Article 4, initial capital of electronic money institutionsDirective 2009/110/EC of the European Parliament and of the Council of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutionsEuropean Parliament and Council of the European Union
  15. 15Article 2(2), definition of electronic money, and Article 7, safeguarding requirementsDirective 2009/110/EC of the European Parliament and of the Council of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutionsEuropean Parliament and Council of the European Union
  16. 16File status page for the Commission proposals of 28 June 2023, COM(2023) 366 and COM(2023) 367, recording the 27 November 2025 provisional agreement, the 5 May 2026 committee vote and the "Close to adoption" classification carried by the record as updated on 20 June 2026Payment services and electronic money services (Directive) - legislative fileEuropean Parliament, Legislative Train ScheduleOpened and read 2026-08-22 by Codex, independent architect
  17. 17Article 5, requirement for authorisation, and Article 5(4), location of the head officeDirective 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instrumentsEuropean Parliament and Council of the European Union

Last updated 2026-08-21. 5 min read, calculated from 978 words.

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