Malta EMI vs payment institution: the EUR 350k question

The First Schedule to Cap. 376 lists the activities a Maltese financial institution may be licensed for. Item 4 is payment services - the list in the Second Schedule: account services, cash-in and cash-out, executing transfers, direct debits and card payments, acquiring, money remittance, and payment initiation. Item 10 is the issuing of electronic money. A payment institution holds item 4; an electronic money institution holds item 10 and, in practice, item 4 as well. Chapter 3 of the Rulebook sets the ongoing requirements for both, so these are not two regimes but two permission sets inside a single Act.

The Second Schedule fences a payment institution in. It may hold payment accounts used exclusively for payment transactions, and the funds it receives are neither a deposit nor electronic money. An EMI's proposition is the opposite: it issues stored value that a customer holds and spends over time. Interest on that balance is prohibited under Article 10A of the Act, which is what keeps e-money distinct from a bank deposit. If your product parks a spendable customer balance, that is the electronic money line, and it is the line the licence class turns on.

Initial capital is where the two licences part company. The Rulebook sets a payment institution's floor at EUR 125,000 for the core payment services 2(a)-(e), EUR 20,000 for pure money remittance, and EUR 50,000 for payment initiation. An electronic money institution starts at EUR 350,000. These are the PSD2 and e-money minima with no Maltese gold-plating, but the e-money floor is nearly three times the payment-services one, and it is a permanent balance-sheet commitment, not a one-off cost.

Ongoing own funds diverge too. A payment institution must hold the higher of its initial capital or a Method B figure scaled to payment volume - a tapering percentage of a twelfth of the prior year's throughput. An EMI must hold the higher of EUR 350,000 or 2% of its average daily outstanding electronic money, so its capital tracks the size of the float it has issued. For both, at least 75% of own funds must be common equity tier one. The practical read: a payment institution's capital follows how much it processes; an EMI's follows how much value it stores.

The fee schedule, S.L. 376.03, groups activities into two categories. Category 1 covers lending, leasing and the other non-payment First Schedule activities; Category 2 is the payment box - item 4 payment services and item 10 e-money. A pure payment institution runs one Category 2 activity and pays a EUR 10,000 application fee and a EUR 25,000 annual supervisory floor. An EMI that also provides payment services - the normal case - runs both Category 2 activities, and the numbers step up to a EUR 15,000 application fee and a EUR 35,000 annual floor, each carrying a variable component on top capped at EUR 250,000.

Two honesty points. The supervisory fees are recent and material: the floor rose from EUR 2,500 to these levels when L.N. 366 of 2024 replaced the old schedule on 1 January 2025, so any figure you find on advisory sites quoting a few thousand euro is stale. And the fees are non-refundable and paid in two instalments each year, on 1 January and 30 July. None of this is a SKY7 price - it is the regulator's own tariff, and pricing for a ready-made entity is separate and on request.

Because both licences live in the same Act, a payment institution can widen into e-money without starting over. Adding item 10 is a licence modification, charged at the applicable application fee less 25% under regulation 3(2) - a change to an existing authorisation, not a fresh licence. That is a genuine sequencing option for a founder who wants to launch on payment rails first and issue stored value once the volume is there.

The catch is that the modification is the cheap part. Widening to e-money pulls the initial-capital floor up to EUR 350,000, moves ongoing own funds onto the float-based basis, and steps the fee band from one Category 2 to both. Budget the balance-sheet jump, not just the modification fee. Where the timeline matters more than the build, an operational entity that already holds the permission you need can be the faster route - SKY7's live ready-made Maltese authorised payment institution is an operating licence holder rather than a shelf company, with pricing on request.

Since the Markets in Crypto-Assets Regulation took hold, one difference is no longer about euros of capital at all. An electronic money institution that issues e-money tokens - the euro-referenced instruments a market calls fiat-backed stablecoins - falls under the MiCA e-money-token regime by derogation, as the Rulebook records at R3-3.3.9. A payment institution licence confers no MiCA rights whatsoever.

For a founder whose product is a tokenised balance or a stablecoin, that settles the class outright: the payment institution simply has no rail to issue the token, so the EMI is the only door. If tokens are not on your roadmap, the MiCA overlay is a cost and a complexity you can decline by staying a payment institution. Our founder's guide to the EU EMI licence walks the wider electronic-money picture across the bloc.