The UK EMI licence, and how to verify one

A UK EMI licence — properly, authorisation as an electronic money institution under the Electronic Money Regulations 2011 — is what permits a non-bank to issue e-money and provide payment accounts in the United Kingdom. Most fintech “accounts” that are not bank accounts sit on one.

It is also one of the most loosely described permissions in provider marketing, which makes the five-minute check below worth doing on any UK counterparty.

Authorisation, not registration — and why that distinction runs the other way here

On our FINTRAC page we make the point that Canada’s MSB regime is registration-based: the supervisor records you, it does not approve you. The UK e-money regime is the opposite case. Authorisation means the FCA assessed the firm — its capital, its safeguarding arrangements, its management — before permitting it to operate.

That makes “authorised by the FCA” a genuinely stronger claim than “registered”. It also makes the inflation pattern different. In Canada, firms upgrade a registration to a “licence” in their copy. In the UK, firms holding much weaker relationships with the FCA compress them all into “FCA-regulated” and let the reader assume full authorisation. Both patterns are checkable in minutes, and firms know most readers never check.

The two tiers

The register will show a UK e-money firm as one of two things:

• Authorised EMI — full FCA assessment, no cap on scale.
• Small EMI — registered rather than authorised, capped on average outstanding e-money, and subject to lighter entry scrutiny.

Neither is improper. But they are different levels of examination, and a counterparty’s tier belongs in your file, not just its name. The register states the tier plainly on the firm’s page.

No FSCS. Safeguarding instead.

The single most important fact about e-money for a business holding balances: e-money is not a deposit, and the FSCS does not protect it.

What protects it is safeguarding: customer funds held segregated at a credit institution (or covered by an insurance policy), so that in an insolvency they are returned to customers rather than absorbed by creditors. Safeguarding works when done properly. It has also been the subject of repeated FCA attention precisely because it is not always done properly, and distributions from failed EMIs have taken years and carried costs.

For diligence purposes: ask where funds are safeguarded and how often the firm reconciles. A provider that answers those two questions crisply is telling you more than any badge on its homepage.

How to check a UK counterparty, in order

1. Get the firm reference number (FRN) — six or seven digits. Not a logo, not a screenshot.
2. Look it up on the Financial Services Register yourself, at register.fca.org.uk.
3. Read the status line. “Authorised” and “Registered” are different tiers; “Appointed representative” means the permission belongs to someone else entirely.
4. Check the permissions against what you need the firm to do for you.
5. Check trading names. The brand you are dealing with should appear on the regulated entity’s page. If it does not, establish exactly which legal entity you are contracting with.
6. Check requirements and restrictions. The register records limitations on a permission — including, for some firms, restrictions on taking on new business.
7. Ask about safeguarding — where, and reconciled how often. The register will not tell you this; the firm should, without hesitation.

The “FCA-regulated” compression

These are all real relationships with the FCA, and none of them is an e-money authorisation:

• payment institution status (payments, but no e-money issuance);
• small payment institution registration;
• appointed representative of an authorised firm (the permission is the principal’s);
• cryptoasset AML registration (an anti-money-laundering registration, not authorisation — the FCA itself required registered cryptoasset firms to make this distinction clear in their promotions).

Each of these appears in marketing as “FCA-regulated”. The compression is legal in some cases, misleading in spirit in most, and always resolvable by the register in under five minutes.

Where KwiikPay stands

KwiikPay is a trading name of KWP Finance Limited, registered in Canada with FINTRAC as a money services business including dealing in virtual currency (registration C100000942), and with the Bank of Canada as a payment service provider under the Retail Payment Activities Act. We are not a UK EMI, and we do not describe ourselves as one. Accounts and rails are provided through regulated banking and electronic money partners; we are the settlement and service layer on top.

We hold ourselves to the same standard this page applies to everyone else: state the actual permission, name the register it can be checked on, and never let a reader assume a stronger status than the one held.