News / 2021 / Electronic Money Institutions - Alternative Banking Solutions for Online Business
Electronic Money Institutions - Alternative Banking Solutions for Online Business
The Electronic Money Institution (EMI) industry has been expanding continuously.  Online entrepreneurs often struggle with structuring their online business, opening bank accounts and merchant accounts. An increasing number of businesses prefer EMIs compared to traditional banks. The main reason is that an EMI is more operationally efficient than a brick-and-mortar bank.
Two major obstacles for online business
Legal restrictions and payment issues.

It can be frustratingly difficult to get an account for your online business with a traditional bank. The constant fear of losing access to the financial system due to never-ending compliance issues hinders aspiring new entrepreneurs in the field to get about their own business. Depending on the content of the website, many EMIs are willing to fill up the gap left by traditional banks.

EMIs are companies licensed to provide financial services to third parties and store their funds on special segregated accounts. Being more agile and fast in their operations, EMIs are a great alternative to traditional banks. Since they are considerably smaller, they operate at a faster pace and without the need to meet their clients physically. 
How an EMI operates

An EMI operates through an electronic online platform and its license allows the issuance of debit cards. By extension, payments can be made either by using the EMI online platform or the issued debit card.
Not only that, EMIs offer currency conversion as well as e-wallet accounts for a fast and secure flow of funds. Yet again, they comply with all banking regulations in their country of setup. Furthermore, many EMIs offer currency conversion services, execute wire payments such as SWIFT or SEPA as well as issue a unique IBAN number in just a few steps which allows clients to send and receive funds from or to their own legal entities’ name.

Which EMI to choose

There are around 500 EMIs operating in Europe. Luckily, having an EU company opens up a plethora of options for banking. With that being said, having your company set up in Cyprus is a plus as Cyprus companies are seen favorable by EMIs which is the reason we suggest our clients to set up their company in Cyprus. Having a company formed in Cyprus brings a plethora of benefits such as 12,5% corporate tax rate which is one of the lowest in the EU, 0% tax on dividend payments, 0% on dividends received from subsidiary companies all over the world and many more.

The EMIs that we recommend are regulated and well suited for your industry or line of work.

They follow all the rules and necessary due diligence checks just like a traditional bank. However, their only difference is that EMIs introduce faster compliance procedures and offer better protection against sudden account closure.

Ok tell me more! My bank is charging me an arm and a leg!

New EMIs provide businesses with the latest payment processing technology, industry-level security, and comfort of management, better, than any financial institutions, with competitive commissions. The innovative nature of such institutions suggests that the products they are offering will improve further and their customers will be more successful.

If you would like to know more about setting up your company in Cyprus, take a look at our article here that explains further why you should form your company in Cyprus as well as the process of opening your merchant and EMI accounts.

Get in touch with one of our experts using the form below to guide you further as well as answer to any questions you may have.  

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