# EME

> Electronic Money Institution (Établissement de Monnaie Électronique)

A specific status for issuing and managing electronic money: wallets, prepaid cards, Banking-as-a-Service accounts. Treezor, Swan and Sumeria are French EMEs.

_Category: acteur_

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## Definition

An **EME** (_Établissement de Monnaie Électronique_, electronic money institution) is a PSP licensed to issue, manage and distribute electronic money (_e-money_): units of value stored on an electronic medium (card, wallet, account) against funds received.

Stemming from the second Electronic Money Directive (EMD2, 2009), the status is granted by the ACPR, with a minimum capital of €350,000.

## What is electronic money

Three cumulative criteria (Article L.315-1 of the CMF):

- **Stored electronically** (prepaid card, wallet, application token).
- **Issued against funds received** (€1 received = 1 unit issued, never money creation as an EC does).
- **Accepted by third parties** as a means of payment.

This is what distinguishes e-money from a simple accounting claim: transferable, accepted by other players and redeemable at any time by the holder.

## EME vs EP vs EC

| | EP | EME | EC |
|---|---|---|---|
| Min. capital | €20-125K | €350K | €5M |
| Issues e-money | No | Yes | Yes (rare) |
| Issues cards | Acquirer only | Issuer (BIN sponsor) | Yes |
| Takes deposits | No | No | Yes |
| Ring-fencing | Yes (third-party EC) | Yes (third-party EC) | No |
| Granting credit | Tied to payment | No | Yes |

In practice, the EME is a specialised "super EP": it can perform all the payment services of an EP, plus the issuance of e-money.

## The BaaS case: why so many fintechs are EMEs

The EME status is the legal foundation of European Banking-as-a-Service. Issuing white-label cards (a Visa or Mastercard programme) requires being a _principal member_ of the network — and therefore holding a BIN and bearing the issuer risk, a role reserved for ECs and EMEs. Hence the structuring of Treezor, Swan, Modulr, Solaris and Hype as EMEs.

## Strict ring-fencing of funds

Like an EP, the EME ring-fences the funds backing the issued e-money, with a third-party EC or through safe assets. In the event of failure, the wallet is not a deposit (so it is not covered by the FGDR), but the money is isolated from the EME's balance sheet.

## What an EME cannot do

- **Grant credit** (except short-term credit ancillary to a payment, like an EP): neither consumer credit nor a structural overdraft.
- **Take deposits**: e-money is not a deposit and remains redeemable at any time.
- **Remunerate the e-money**: prohibited under European law. To offer a yield, EMEs go through a SICAV or a partner EC (Sumeria with Carmignac, for example).
- **Be supervised by the ECB**: EMEs stay with the ACPR (outside the scope of the SSM).

## In the PSD2 ecosystem

The EME is a PSP within the meaning of DSP2: it bears the SCA obligations, can be an ASPSP (if it holds payment accounts) and must comply with the API RTS. It is also through EMEs that the majority of early-stage fintechs operate, on their own or as agents (Treezor, Swan, Modulr).

```mermaid
flowchart TB
    EME["EME — Electronic Money Institution"]

    subgraph EMISSION["E-money issuance"]
        WALLET["User wallets"]
        CARTES["Prepaid cards<br/>(Visa/MC BIN sponsor)"]
        BAAS["BaaS for fintechs<br/>(API + virtual accounts)"]
    end

    subgraph PAIEMENTS["Payment services (like an EP)"]
        VIR["Transfers"]
        SDD["Direct debits"]
        ACQ["Acquiring"]
    end

    EC_TIERS["Third-party EC — fund ring-fencing"]
    ACPR["ACPR — licensing + supervision"]

    EME --> EMISSION
    EME --> PAIEMENTS
    EME -->|"Ring-fences client funds"| EC_TIERS
    EME -.->|"Supervises"| ACPR
```

## Concrete examples

- **French EMEs**: Treezor (a Société Générale subsidiary, BaaS leader), Swan (API-first BaaS), Sumeria (born from Lydia, 2024), Lemonway and Mangopay (marketplaces), Hype (prepaid cards).
- **European EMEs**: Modulr (UK), Solaris (Germany), Railsr (UK), Wise (multi-currency), Revolut (UK EME before its move to EC).
- **The Qonto case**: it issues its cards white-label via Treezor as an agent. Treezor holds the Mastercard relationship, Qonto operates the product — a move to doing it itself is planned with the EC licence.
- **Sumeria and remuneration**: since e-money cannot be remunerated, Sumeria distributes the funds via a Carmignac money-market SICAV that "carries" the yield.
- **Cost of the status**: minimum capital of €350K, own funds calculated on the e-money outstanding in circulation (~2% on average), quarterly reporting and an annual audit.
- **Licensing lead time**: 9 to 18 months with the ACPR, with a high failure rate on the first application — compliance support is almost mandatory.
- **PSD3 evolution**: the EME status disappears and issuing electronic money becomes a payment service like any other. An EME that is already licensed carries on until 27 months after entry into force. If it proves to its authority that it complies, it is deemed licensed as a payment institution (art. 44 and 45). The initial capital required for issuing electronic money is EUR 250,000, cumulative with that of the other services (art. 5). Text not yet adopted, provisional numbering of the April 2026 compromise.

## Sources

- [Directive 2009/110/CE concernant l'accès à l'activité des établissements de monnaie électronique (EMD2)](https://eur-lex.europa.eu/eli/dir/2009/110/oj) — EUR-Lex, 2009-09-16
- [Établissements de monnaie électronique](https://acpr.banque-france.fr/autoriser/procedures-secteur-banque/etablissements-de-monnaie-electronique) — ACPR / Banque de France

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Source: https://openfinanceguide.com/en/glossary/eme