Payment services are regulated by the Financial Institutions Act, which also regulates Electronic Money Institutions (since July 2011) and other financial services.
An Electronic Money Institution (“EMI”) is defined in the Third Schedule to the Act as “a financial institution that has been licensed in accordance with this Act and authorised to issue electronic money or that holds an equivalent authorisation in another country in terms of the Electronic Money Directive to issue electronic money”.
Electronic Money means electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions as defined in the PSD, and which is accepted by a natural or legal person other than the issuer.
Applications must be submitted to MFSA. EMIs are expected to satisfy a minimum initial capital requirement of €350,000.
Main Features of Electronic Money Institutions
- The minimum initial capital requirement is €350,000. The licensed EMI is obliged to ensure that its own funds do not fall below this amount of initial capital.
- Members of the Board of directors, senior managers and shareholders of the applicant are subject to a rigorous due diligence exercise whereby their fitness and properness will be assessed during the application stage.
- It is necessary to have at least two Malta based business controllers who will effectively direct the business of the institution. Such persons must be of a sufficiently good repute and must have sufficient experience to perform such duties and able to maintain adequate transmission of information to MFSA.
- Outsourcing of services may be allowed as long as it has been approved by MFSA.
The costs imposed by the MFSA are as follows:
- One-time Application Fee payable upon submission of an application (€3,500)
- Annual supervision fee which will be equivalent to a percentage of the total assets and must be not less than €2,500.
Once the Malta licence is issued, the EMI would benefit from the right to passport the licence into other EU Member States thus enabling the EMI to provide its services within the relevant Member States either through the establishment of a branch or remotely, under the freedom to provide services.