Capital Requirement
A capital requirement is the minimum amount of own funds a regulator obliges a licensed payments or e-money firm to hold, sized to its licence type and activity, so it can absorb losses and wind down safely. It is initial capital plus an ongoing amount that scales with the business.
Underestimating capital is a frequent reason a licence application stalls or a live firm falls into breach, and a capital shortfall found in a review can restrict operations fast. Sizing capital correctly before you apply, initial and ongoing, is what keeps a licence application on schedule rather than sent back for rework.
An EMI licence is the authorisation a regulator grants a firm to operate as an Electronic Money Institution: issuing e-money and providing payment accounts and services.
A Payment Institution is a firm licensed to provide payment services, such as executing transfers, acquiring transactions, or issuing payment instruments, without issuing e-money.
Safeguarding is the regulatory obligation on EMIs and payment institutions to protect customer funds by holding them separately from the firm’s own money, typically in a segregated account at a credit institution or covered by an insurance arrangement, so customers are repaid if the firm fails.
The Financial Conduct Authority is the United Kingdom’s regulator for financial services firms, including EMIs, payment institutions, and many crypto businesses for AML purposes.