Becoming an eMoney Operator: Starting your Own Money Transfer Business

Licensing eMoney Operator

As the internet has evolved, eMoney businesses have boomed. Improving consumer confidence in online finance is responsible for this, as younger demographics now comprise a higher percentage of their customer base. To serve it, savvy fintech entrepreneurs have founded scores of these operations around the globe.

Despite the potential for growth in the cash transfer industry, getting started can be quite tricky. In major markets around the globe, regulations differ markedly. In this guide, we’ll explain precisely what needs to be done to launch an eMoney startup, wherever you might be.

Looking to start your own foreign exchange business? Looking at two of the top markets, and seeing the requirements, it’s not easy!


Getting an eMoney license in the UK

The FCA, or Financial Conduct Authority, licenses all eMoney businesses in the United Kingdom. Fintech startups can apply for three different licenses, but we’ll focus on EMIs (or electronic money institutions).

Two subcategories exist for EMIs: small EMIs (those who process less than €5 million per month) and authorised EMIs (processes more than €5 million per month). The licensing procedure for small EMIs is cheaper and more straightforward, but they don’t afford firms passporting rights. As a result, small EMI firms cannot operate in EEA countries, whereas authorised EMIs can.

To be awarded an authorised EMI license, the startup must first comply with Money Laundering, Terrorist Financing and Transfer of Funds regulations, as set out by the British government. This step provides assurances that a firm cannot be used to move money for nefarious purposes.

Secondly, you must prove you have €350,000 in starting capital to begin the certification process. Liquidity is vital to protect the interests of consumers and businesses an applicant may interact with.

In addition to taking these two steps, an applicant must also submit:

  • A programme of operations
  • A business plan
  • The structure of your organisation
  • Details of any services you plan to outsource
  • Document on how you plan to manage risk
  • Information on any shareholder who holds more than a 10% stake in your firm


These procedures were accurate as of April 2019. However, when the UK exits the European Union, some regulations will change significantly. When relevant data becomes available, we’ll update this space.

Licensing in the United States

Unlike the United Kingdom, the US federal government does not manage the licensing process for eMoney businesses – individual state governments do. In this context, it’s best to think of the United States as a federation of 50 independent nations.

Each has a licensing board, ranging from the Alabama Securities Commission to the Wyoming Division of Banking. Not sure where to apply? Contact the Small Business Administration – as a federal bureau designed to aid entrepreneurs, they will point you in the right direction.

Each has a licensing board, ranging from the Alabama Securities Commission to the Wyoming Division of Banking. Not sure where to apply? Contact the Small Business Administration – as a federal bureau designed to aid entrepreneurs, they will point you in the right direction.

What rules do you need to abide by? Each state is different, but one is common to all, except Montana (which has no regulations governing money transfer businesses): surety bonds.

To apply for an eMoney license, states require applicants to post a minimum bond of at least 1,000 USD to as much as 500,000 USD. This regulation forces firms to show regulators they have enough capital to operate under adverse economic conditions.

As mentioned, regulations vary widely from state to state. An eMoney startup may need to satisfy the following requirements to operate in the USA:

  • Payment of application and licensing fees (ranges from 150-7,500 USD)
  • Address and contact information of stakeholders
  • Proof of adequate net worth (ranges from 1,000-1,000,000 USD)
  • Criminal record check
  • Pass an in-person character examination

The American system of financial regulation isn’t entirely state-based. You must also apply for certification as a Money Services Business with FinCEN (Financial Crimes Enforcement Network). According to the Department of the Treasury, you have 180 days from your businesses’ founding to file  FinCEN Form 107.

Those who fail to comply risk fines and/or imprisonment, so take this step seriously. On this form, you will need to disclose:

  • The address and contact information of the owner
  • The trade name and address of eMoney business(es)
  • In which states/territories you operate
  • Services you plan to render
  • The location of the bank account from which you plan to process transactions

Licensing an eMoney business across all the states in America is a tedious process. When in doubt, contact the financial regulator in relevant states or the Small Business Administration for advice.

Getting an eMoney license in Hong Kong

Want to operate an eMoney business in Hong Kong? You must apply for a license from the Hong Kong Customs & Excise Department (CED). Start by downloading Form 1 (Money Service Operator application) from their website.

On this form, you will need to disclose:

  • The name of your business
  • Your businesses’ registration number
  • The type of money services your business renders
  • Your businesses’ address and contact information
  • Whether it operates in a domestic premise (letters of consent from occupants must be attached)
  • Personal details of all stakeholders, including their addresses and contact information
  • Information on the corporation that controls the Money Service Operator (where applicable)
  • Information on the bank account(s) used to carry out transactions

Additionally, you’ll need to attach supporting documents. These include:

  • Business registration certificate
  • Certificate of incorporation
  • Tenancy agreements
  • Floor plans
  • A business plan
  • Fit and Proper Person Declaration Forms for all stakeholders
  • An authorisation letter signed by all stakeholders


Send Form 1 and all documentation to the HK Customs & Excise Department. After they have processed your application, they will request the remittance of an application fee. As of this writing, the CED charged 3,310 HKD for this service. On top of this, CED assesses an audit fee of 860 HKD for every stakeholder and a 2,200 HKD audit fee for each premise your business operates in.

Money Service Operator (MSO) licenses are good for two years, and you must renew them 45 days before they expire. When an MSO license is issued, the business is required to appoint a Compliance Officer and a Money Laundering Reporting Officer. They must file transaction reports once a quarter, and report suspicious transactions as soon as possible.

Failure to follow these protocols can lead to fines of 1,000,000 HKD and/or seven years imprisonment.


Getting an eMoney license in South Africa

To operate an eMoney business in South Africa, the Reserve Bank of South Africa must certify as an ADLA (Authorised Dealer in foreign exchange with Limited Authority).

Start by downloading the Currency and Exchanges Manual for Authorised Dealers in foreign exchange with Limited Authority from the website of the South African Reserve Bank. Near the end of the manual, you’ll find an application form. On it, you’ll be asked to attach/disclose:

  • A notice of incorporation
  • A registration certificate
  • A memorandum of incorporation
  • The address of your place of business
  • A business plan
  • The identity and details of all stakeholders
  • The trade name of your company
  • Answers to an extensive questionnaire
  • A criminal record check

Once you have assembled all the documentation needed to file your application, mail it to the Financial Surveillance Department in Pretoria. After preliminary approval, a registered bank will examine your assets. Ensure you have at least 5 million ZAR in a segregated account, as this is the minimum amount required for a category 3 ADLA (eMoney businesses fall under this division).

Getting an eMoney license in Ireland

To open an eMoney Business in Ireland, applicants must apply for authorisation as an electronic money institution. The process is involved but straightforward. First, the Central Bank of Ireland directs applicants to review electronic money regulations as set out by the European Union. If there is any doubt, they should seek the advice of legal professionals.

If you can satisfy these regulations, apply for certification as an electronic money institution (EMI). On the application form, you will need to disclose/attach:

  • The corporate and trade name of your business
  • Personal information about yourself and stakeholders (e.g. names, addresses, contact info, etc.)
  • The addresses of your businesses’ head and registered offices
  • Membership in relevant trade organisations
  • A programme of operations (i.e. a document that explains what your EMI will do)
  • A business plan
  • An organisational chart
  • Evidence of capital totalling no less than 350,000 EUR
  • Documentation of measures to safeguard the funds of users
  • Documentation of your firm’s internal governance protocols
  • Documentation of measures to handle customer complaints and security incidents
  • Documentation of your firm’s policies concerning the handling of sensitive payment data
  • Business continuity arrangements
  • Documentation on how you plan to collect data to track performance, transactions, and fraud
  • A security policy document
  • Auditors and/or auditing firms who have analysed your operations
  • Proof of Professional Indemnity Insurance

After filling out the application form and assembling all documentation requested, a few steps remain.

Firstly, you must complete the ‘Anti-Money Laundering, Counter-Terrorist Financing and Financial Sanctions Pre-Authorisation Risk Evaluation Questionnaire’. This step is required to satisfy authorities that your operation will not serve as a front for criminals and terrorists.

Secondly, all stakeholders must fill out Qualifying Holder Application Forms. Doing so will help the Central Bank of Ireland assess whether they have the temperament to operate an eMoney business.

Lastly, you must send both a paper AND a digital copy of your application (and supporting documents) to the Central Bank of Ireland. If you miss anything, a representative will be in contact to request further information.

Getting an eMoney license in Australia

In Australia, the Australian Securities and Investments Commission (ASIC) and the Australian Transaction Reports and Analysis Centre (AUSTRAC) regulate eMoney businesses. If you plan on operating in Australia, the license you’ll need depends on what type of business you’ll be running.

For instance, if you own a Forex business that offers forward contracts, you’ll need an AFS (Australian Financial Services) license. If you settle contracts immediately, an AFS is not necessary, as Australian law does not consider instant money transfers to be financial products. You’ll still need to register with AUSTRAC, though, as they require all remittance firms to be members.

Unlike other nations, ASIC explains the process of applying for an AFS in easy-to-understand language. ASIC urges applicants to begin by reviewing the AFS Licensing Kit. This guide breaks down each step in the process, from how to fill out the application form to required documentation.

Ready to apply for your AFS? Here’s what you’ll need to disclose/attach:

  • Personal details (name, address, contact information, etc.)
  • The registered business name of your operation
  • The address of your business
  • The identity of controlling entities
  • Financial products/services you plan to offer
  • Current assets and revenue
  • Number of employees
  • Identity and contact information of stakeholders
  • Management protocols
  • Legal compliance protocols
  • Proof of adequate financial, human, and technological resources
  • Documentation of dispute resolution mechanisms
  • Risk management protocols
  • Evidence of professional indemnity insurance
  • Proofs related to the financial services business you intend to operate

Applicants are urged to complete their application online (Form FS01). You can also do it offline, but it costs more and takes longer to process. Additional proofs may be needed, but don’t prepare these unless ASIC requests them from you.

All told, AFS license costs range from 3,721 AUD for low-complexity applications to 7,537 AUD for the most complicated ones.

Too Strict Regulation = Lower Competition

While it might seem that this over-regulation would prevent money laundering or unqualified operations from opening their metaphorical doors, it is actually harming the money transfer industry as a whole. The financial marketplace thrives on competition, and this competition directly benefits consumers. In the money transfer industry, whether that’s remittance, travel money exchange, or otherwise, having a globalized marketplace where there are more market players pushes more competitive exchange rates, as simple as that.

On a broader scale, this over-regulation is harming the personal finance industry in general in the United States. By forcing the state to state regulations on businesses who are attempting to do financial transactions internationally, they’re restricting the flexibility that these institutions often need to operate in the best interest of their customers.

With that being said – there is a very good reason as for why enforcing such strongest regulation for an industry as sensitive as international money transfers. A firm that collapses may wipe off its clients’ funds (a-la Crown Currency), and even a security/data breach can prove extremely harmful to clients. That means this industry cannot be left out from any governmental supervision.

The Future of Financial Regulation in the United States

Although the money transfer industry, and the personal finance industry as a whole, has been suffering from stifling over-regulation in recent years, with President Donald Trump now in office things may change. Although it’s never entirely guaranteed what a new President will do when they take office, President Trump has vowed to decrease the amounts of regulation on aspiring money transfer operations and on the financial markets in general. This could, if it is enacted correctly, bring more competition and more options to the financial market, and allow more globalization in the industry. Regardless of what happens now or in the future, noting the differences in the two markets and focusing on how to improve the regulatory process for all sides is key to ensuring a better marketplace for the consumer.

Updated: Trump signs the biggest rollback of bank regulations on March 2019


As shown above, application processes for eMoney operators can be long, complicated, and painful. However, it is the role of financial regulators to protect consumers from bad faith actors.

For instance, requiring segregated client accounts prevents the use of their capital to fund daily operations. Without these requirements, a major incident could hurt a nation’s reputation as a safe place to do business.

By taking the time to satisfy government regulators, you contribute to a system that keeps cash flowing without incident.