Banking with Electronic Money Institutions: Pros & Cons

The movement to reshape the modern payment system landscape continues. The number of authorized EMIs is rapidly growing around the world. It leads to the creation of innovative financial platforms that provide customers with swift and flexible e-payment options. Unlike bank accounts, EMI is a technological breakthrough with many benefits for its clients. Increased payment processing speed, low transaction fees, AI innovations, as well as fast AML / KYC procedures — make EMI the best choice for successful international business.

Despite the increasing adoption, there is evidence suggesting that many may not actually know the opportunities of Electronic Money Institutions. Today we would like to raise a curtain on the most common EMIs’ advantages and disadvantages.

What is EMI?

Electronic Money Institutions (EMIs) are “regulated” companies that are authorized to provide financial services to third parties and store their funds on special segregated accounts.

EMIs offer a wide range of products, services, and solutions in payment processing and alternative banking, including:

• Personal accounts with IBAN;
• Business accounts with IBAN;
• Merchant accounts;
• Payment cards;
• Money transfers;
• Cryptocurrency operations;
• Expense management and more.

EMIs might do NOT (with some exceptions):

• Offer bank accounts as they cannot receive deposits;
• Provide borderless execution of payment transactions, i.e. money transfers might be subject to certain jurisdictions and particular currencies.

Despite these few limitations, Electronic Money Institutions are on the rise:

EMI/PI licenses and income from licensed activities in Lithuania

Pros of EMI accounts

• Safety first. EMIs can assure their customers that their money is safely encrypted and secured within the central accounting system or an electronic carrier operated by the company.
• Zero credit risk. When a customer places their money into a traditional bank, they take up credit risk. This is because banks are authorized to use customers’ money and lend it to someone else. EMIs are not.
• Keeping up with time. EMIs hold to the tempo of progress and offer possibilities that are required right now, in the most comfortable way.
• New solutions on the mind. EMIs have dozens of payment options, that may be better for their clients.
• Swiftness. EMI money transfers between virtual accounts are fast, secure, and confidential. Unlike bank transfers, which can take several days, EMI transactions take several minutes.
• Additional services & 24/7 support. Some EMIs give access to cryptocurrencies, such as Bitcoin, thereby, providing borderless execution of payment transactions. Find more crypto services at the Finscanner marketplace.

Cons

• Limitations. The maximum number of transactions per day and their size for each client of EMIs can be limited. However, for the majority of cases, these government limitations are still way ahead of real needs.
• Funds dispersion. It can be advantageous for customers, but for the business itself, it may be disadvantageous. Different payment options can leave funds hanging around in different places, making it hard to gather them all together.

Open your EMI account with the Finscanner marketplace

One can find many reasons for opening an EMI account as a smart financial move. If you’re thinking of setting up an account and would like to find more details, the Finscanner marketplace is a great place to find the right account for your needs.

Here are some of the EMIs you can explore:

• UAB SatchelPay — an electronic money institution focused on facilitating global payment transactions. UAB SatchelPay offers virtual personal IBAN accounts, virtual business IBAN accounts, merchant accounts with IBAN, physical prepaid cards, virtual prepaid cards, currency exchange, international payments, software development, white-label solutions, white-label card issuing to private individuals, international businesses, financial institutions, online merchants, legal entities, entrepreneurs.

|* KoalaPays — a small electronic money institution, focused on local and international money transfers. Safe Payments Solutions offers business all-in-one multi-currency accounts with over 10 currencies, physical and virtual cards. Incorporated in the Czech Republic, Safe Payments Solutions s.r.o. is authorized and regulated by the Czech National Bank.

• Wallter UAB — an electronic money institution focused on checkout and payment solutions for businesses. Wallter UAB offers IBAN accounts, payroll cards, virtual cards, business cards to businesses. In 2020 Wallter UAB had total customer funds to be safeguarded of 52.41 mln EUR, Wallter UAB generated gross profit of 9.45 mln EUR. Incorporated in Lithuania, Wallter UAB is authorized and regulated by the Bank of Lithuania.

Find more Electronic Money Institutions at the Finscanner marketplace to open your first account and explore all the benefits of the financial world!