EMI or Bank: where to open an account?

Sooner or later, any company faces the question of opening an account in a financial institution for managing funds. Banks are generally believed to be reliable and infallible options in this situation, but there are actually other alternatives that should be looked at before making a decision, such as EMI.

Let’s start with the question of what EMI is and how does EMI differ from a banking institution?

EMI (Electronic money institutions) is a legal entity that has received a license in accordance with the Second Directive of the European Union about electronic money for issuing electronic money. The idea behind EMI is that customers exchange their cash for EMI-issued e-money and store it in their e-wallets. After that, customers can pay for goods and services with electronic money and perform other payment operations.

EMI can open regular payment accounts like banks do, they also provide corporate and personal bank card issuance services, IBAN accounts with SWIFT/SEPA, and multi-currency accounts (EUR, USD, GBP and other popular currencies). Individuals and legal entities can store their funds there, make and receive payments, and transfer funds. At the same time, unlike banks, services line of credit, investment banking and wealth management for EMI – limited and in some cases not available at all.

In this aspect, it is also important to note that unlike banks, EMI separates funds received from clients and own funds. EMI is prohibited from using customer funds for purposes other than transactional related to the issuance and redemption of electronic money. This means that EMI must hold $1 in guaranteed funds for every dollar of e-money liabilities it issues, while banks can hold $1 in funds for every $10 of deposit liabilities.

Suppose EMI issued $1000 in e-money, in which case EMI should have $1000 of guaranteed funds in the account. In comparison, a bank can keep $1 in funds and still provide $10 in deposits to its customers. EMIs are also interesting for their technical functionality, as they quickly respond to the implementation of new technical solutions on the market and allow integrations through APIs, mass payments, and salary projects. Many EMIs also provide acquiring services, which can be an interesting solution for many companies.

So, having understood what EMI is, we recommend that you acquaint yourself with the pros and cons of opening an account in each of them mentioned below.

EMI accountBank account
EMIs reduce their costs, thereby offering services at lower fees.
Account maintenance often requires higher costs.
Reliability and speed of payment processing;
Reliability of payment processingCompared to EMI, the processing speed is much lower.
EMI offers services related to cryptocurrencies more often than banks.
Increasingly, banks are defining themselves as Crypto-Friendly, thereby providing services in the field of cryptocurrency exchange (for example, Revolut,

Quontic, Ally Bank, Bank of America)

EMIs can open a business account in a few days.
Banks can take much longer to open accounts.
Services credit line, investment banking and capital management are not available in connection with opening an EMI account.Banks offer a wider list of services compared to EMI
Physical presence is not required to open an account.
Physical presence is often required to open an account
Compared to high risk banking institutions, customers are more likely to open an account with EMI. For clients with increased risk, including: offshore, gaming companies, crypto business, EMI is a valuable alternative to traditional banks.
The bank is not pleased to open an account for high risk clients
EMIs are required to protect client funds by segregating personal and client funds.“Deposit guarantee schemes” are in place, according to which the protection of deposits at the level of 100,000 euros is ensured
The activities of both EMI and banks are regulated by local regulators and authorities. Both EMI and bank must comply with KYC and AML and other acts of current legislation.


Summarizing the above, it can be noted that banks can offer a wider range of services and a higher level of security than EMI, but at the same time, banks appear to be conservative, inflexible, formal institutions in terms of working with clients and implementing modern systems. On the other hand, EMI is radically different, providing the latest services that are closely related to the needs of the business world today and are less constrained by licensing requirements.

If you need an institution with a wide range of products and services, a bank will be the best choice in this case, but in the case of looking for an institution with lower commissions and more loyal terms, the best option will still be EMI. The most famous in the EMI market are Wise and Paysera.

Now that you know the key differences between these institutions, you can decide which type of institution is right for you.


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