MEMA Scope · Assessment
Do e-money issuers and digital wallets need FCA authorisation?
A firm issues electronic money, for example a digital wallet or prepaid account where customers store value that can be redeemed. Review the initial view below and answer a few questions to refine it.
- Personalised to your business
- FCA rule references
- Follow-up questions available
Potential regulated activity identified
Issuing e-money may require authorisation or registration
Issuing e-money needs authorisation as an e-money institution, or registration as a small e-money institution if the conditions are met.
Route to consider: Direct authorisation (full permission)
Why this was flagged
- 1Issuing electronic money in exchange for funds is a regulated activity under the Electronic Money Regulations 2011.
- 2A wallet where balances are redeemable at par typically involves e-money.
Questions still to resolve
Answer to refine the view. The result updates as you go.
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Will average outstanding e-money stay under EUR 5m and monthly payments under EUR 3m?
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Will a bank or authorised e-money institution issue the e-money under its own licence, with you only providing the customer interface?
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Will you also provide payment services unrelated to e-money, such as remittance?
Regulatory basis to examine
Your next steps
- 1Confirm that your product is e-money and who issues it
- 2Decide between authorised and small e-money institution status
- 3Design safeguarding and redemption arrangements
- 4Prepare financial crime controls and operational resilience evidence
Where applications for this model most often fall short
- Safeguarding design and reconciliation evidence
- Redemption terms that meet the rules
- Programme manager or issuer partner contracts
This is an initial indication from published FCA material, not an FCA determination or legal advice.
If authorisation is required, check the firm’s governance, policies, resources and application preparedness.
MEMA Scope gives an initial view from published FCA material. It is not legal advice or an FCA determination. Automatic matching and typed questions use AI only to choose a profile and to answer from vetted guidance; the assessment itself is never written by AI.
About this business model
A firm issues electronic money, for example a digital wallet or prepaid account where customers store value that can be redeemed.
Issuing e-money needs authorisation as an e-money institution, or registration as a small e-money institution if the conditions are met.
This page gives an initial view from published FCA and legislation sources. It is not an FCA determination or legal advice. Not your business model? Describe your business in MEMA Scope.
E-money issuer or digital wallet: frequently asked questions
Do digital wallets need FCA authorisation?
A digital wallet that stores value redeemable at par is likely to involve e-money. Issuing e-money requires authorisation or registration as an e-money institution unless a partner issues it under its own licence.
What is a small e-money institution?
A small e-money institution registers where average outstanding e-money and payment volumes remain below the thresholds in the EMRs.
What could change the answer for e-money issuers and digital wallets?
Issuing e-money needs authorisation as an e-money institution, or registration as a small e-money institution if the conditions are met. It can change depending on the answers to questions such as: Will average outstanding e-money stay under EUR 5m and monthly payments under EUR 3m? Will a bank or authorised e-money institution issue the e-money under its own licence, with you only providing the customer interface? Will you also provide payment services unrelated to e-money, such as remittance?
Which FCA rules should e-money issuers and digital wallets look at first?
Start with: Perimeter guidance on e-money; Small e-money institutions; FCA: electronic money and payment institutions; Safeguarding of relevant funds. This is an initial view from published FCA material, not an FCA determination.
What are the first steps for e-money issuers and digital wallets?
Confirm that your product is e-money and who issues it. Decide between authorised and small e-money institution status. Design safeguarding and redemption arrangements. Prepare financial crime controls and operational resilience evidence.
Businesses we check
MEMA Scope covers 32 common business models. Each page explains whether that kind of business may need FCA authorisation, the rules to look at and the routes to consider.
Consumer credit
- Do car dealers offering finance need FCA authorisation?
- Do motor finance brokers need FCA authorisation?
- Do retailers offering buy now pay later need FCA authorisation?
- Do consumer lenders need FCA authorisation?
- Do debt collectors and debt administrators need FCA authorisation?
- Do debt management and debt advice firms need FCA authorisation?
- Do credit lead generators and comparison sites need FCA authorisation?
- Do rent-to-own and vehicle leasing providers need FCA authorisation?
- Do credit brokers introducing customers to lenders need FCA authorisation?
Payments and e-money
- Do payments apps and payment processors need FCA authorisation?
- Do small payment institutions need FCA authorisation?
- Do agents of payment institutions need FCA authorisation?
- Do open banking providers need FCA authorisation?
- Do money transfer and remittance businesses need FCA authorisation?
- Do marketplaces handling payments need FCA authorisation?
Insurance
Mortgages
Investments and wealth
- Do financial advisers need FCA authorisation?
- Do discretionary investment managers need FCA authorisation?
- Do investment platforms and wealth-tech firms need FCA authorisation?
- Do crowdfunding and peer-to-peer lending platforms need FCA authorisation?
- Do corporate finance boutiques need FCA authorisation?
Other regulated activities
- Do claims management companies need FCA authorisation?
- Do funeral plan providers and sellers need FCA authorisation?
- Do introducers and referral partners need FCA authorisation?
- Do international firms entering the UK need FCA authorisation?
- Do accountants and solicitors giving financial advice need FCA authorisation?
Want a consultant to look at your facts?
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