The EMD Agent Route: How to Sell Payment Accounts Under Your Brand Without Your Own Licence, and What Nobody Tells You

By Rene Philippe Raymond Dubout · 24 October 2026 · Updated 4 November 2026

Can you offer accounts, IBANs and payments to your clients under your own brand without holding a licence? Yes, and thousands of businesses in Europe do it every day. You become the agent of an electronic money institution (EMI) that already holds the licence. The market calls this an “EMD agent”, after the E-Money Directive. It is the fastest and cheapest way into regulated payments, and for many founders it is the right first step.

It is also a rented flat, not a house you own. Our own older posts on this subject were enthusiastic, and on a few legal points they were simply wrong. Here is the corrected version: what an agent really is, what it can do, what it cannot do, and when it makes sense.

What an agent actually is

An agent is a company that provides payment services on behalf of a licensed institution, called the principal. The agent has no licence of its own. The principal registers it with its regulator, the Financial Conduct Authority (FCA) in the United Kingdom or, for example, the Bank of Lithuania in the European Union, and the agent then appears on the public register under the principal’s name.

Three consequences follow, and every founder should understand them before signing anything:

• The principal is fully responsible for you. In law, the principal answers for everything its agents do. That is why it will control your onboarding, your compliance and your marketing, and why it can end the relationship if it does not like what it sees.
• The client money is safeguarded by the principal. Your clients’ funds sit in the principal’s safeguarding accounts, not in yours. The accounts and IBANs your clients receive are provided by the principal.
• The principal does the anti-money laundering work, or supervises yours. Its risk appetite becomes your risk appetite. If it does not accept crypto businesses or clients from a given country, neither do you.

What an agent can and cannot do

An agent can provide the payment services that its principal is authorised for: payment accounts, transfers, money remittance, card acquiring or issuing if the principal holds those permissions, all under your brand and on your platform.

What it cannot do is issue electronic money. The rule is explicit. In the United Kingdom, regulation 33 of the Electronic Money Regulations 2011 allows an EMI to distribute and redeem e-money through agents and distributors, but not to issue it through them; the E-Money Directive says the same in the European Union. Our 2022 and 2024 posts said that the agent “has the same content as the main licence, including the issuance of electronic money”. That was wrong, and I prefer to say so here rather than let you discover it in a regulator’s letter. The e-money is always issued by the EMI, in its name, on its balance sheet. You distribute it.

For your client, the difference is often invisible: he gets an account and a card with your logo. For you, it matters, because it means the client contract, the money and the licence all belong to someone else.

United Kingdom or European Union?

Since Brexit, the two markets are separate. An agent of a UK EMI serves clients through the UK licence; it gives you no right to offer services across the European Union. An agent of an EMI licensed in an EU country, such as Lithuania, can serve clients in other EU countries only through the principal’s passport, once the principal has notified its regulator. If your clients are mainly European, choose an EU principal. If they are mainly British, choose a UK one. If they are in Asia, ask first which principal will accept them at all.

How long does it take?

Much less than a licence. Once the principal has completed its due diligence on you and filed the registration, the regulator typically decides within about two months. Add the time to build your onboarding flow and integrate with the principal’s platform, and two to four months is a realistic horizon for a well-prepared company. Your own EMI licence, by comparison, usually takes a year or more.

The agent route compared

One of our 2024 posts argued that an agent route plus a payment institution in Ireland was smarter than buying a UK small payment institution. The logic still holds: the small payment institution is capped at an average of EUR 3 million a month, cannot issue e-money and has no passport. But note that an Irish payment institution offering account-based services needs EUR 125,000 of initial capital, not the EUR 50,000 we wrote at the time.

What nobody tells you about renting a licence

• Your business lives at the principal’s pleasure. The agency contract can be terminated, usually with a few months’ notice, sometimes faster if the principal’s regulator steps in. On that day, your clients’ accounts go with the principal. Read the termination and migration clauses before anything else.
• Your principal’s problems become yours. If the regulator restricts your principal’s activities, your business stops with it, through no fault of yours. Check the principal’s regulatory history, its safeguarding arrangements and its banking partners as carefully as it checks you.
• The economics are rented too. You pay set-up fees and monthly fees, and the principal takes part of the margin. That is fine at the start. At scale, it can make owning your own licence cheaper.
• You build no regulatory asset. When you sell your business, you sell a brand, clients and a contract, not a licence. A buyer will discount for that.

None of this is a reason to avoid the agent route. It is a reason to enter it with your eyes open and an exit plan in your drawer.

When the agent route makes sense

It makes sense when you want to test a market quickly, when your strength is distribution or brand rather than regulation, or when your volumes do not yet justify the capital and the staff of your own licence. It makes less sense when your whole valuation depends on owning the client relationship, or when you already know you will need to issue e-money in your own name.

The classic path is: start as an agent, prove the model, then buy or build your own licence when the volumes justify it. Plan the migration from the first day, because moving thousands of clients from one licence to another is a project in itself.

The route we recommend

FintechLex sets up agent structures with partner EMIs, in the United Kingdom and in the European Union, from the choice of principal to the registration, the onboarding flow and the integration. When you are ready to own your licence, we also have EMIs for sale, already licensed and passported. Tell us who your clients are, where they are and what you want to offer them, and we will tell you whether the agent route fits, and which principal is likely to accept you, before you spend a pound or a euro. Write to insight@fintechlex.com, or see the EMIs currently for sale in our Marketplace. For the licensed EMI route, read our EU EMI licence guide (Lithuania, Latvia, Ireland), and for the Swiss alternatives, SRO, Fintech Licence or EU EMI?

If you need an EMI licence or want to buy a licensed EMI, see our EMI licence and EMI acquisition service.

This article is for general information only and does not constitute legal advice.

Sources

• Electronic Money Regulations 2011 (UK), regulation 33 (agents and distributors; no issuance of e-money through agents).
• Payment Services Regulations 2017 (UK), regulations 13 (small payment institutions) and 34 (use of agents); FCA Perimeter Guidance PERG 15 (EUR 3 million monthly average for small payment institutions).
• Directive 2009/110/EC (E-Money Directive), Articles 3 and 4 (distribution through agents; initial capital of EUR 350,000).
• Directive (EU) 2015/2366 (PSD2), Articles 7 (initial capital of payment institutions), 19 (use of agents) and 20 (liability for agents).