EMI vs PSP vs VASP vs CASP: Which Financial Licence Do You Need?

Founders building cross-border financial products in the EEA repeatedly conflate four very different regulated activities — payment services, electronic money issuance, crypto-asset services, and the legacy VASP perimeter. The licences look interchangeable on a slide. They are not. Each authorises a specific set of activities under a different regulator's perimeter, with different capital, different ongoing cost, and different commercial leverage. Picking the wrong one wastes 12–24 months and burns the founding capital that should have been spent on product.

EMI authorises issuing electronic money and the payment services that come with it. PI authorises payment services without e-money issuance. VASP was the pre-MiCA national registration regime for crypto exchange and custody — sunsetting in most member states between 1 July 2026 and 30 December 2026. CASP is the MiCA authorisation that replaces it across all 30 EEA member states.

This guide explains what each licence actually authorises, the capital and timeline differences, when combined licences (EMI + CASP, PI + CASP) are the right architecture, and the decision tree for picking the right one for your business model. Read this before you brief the lawyers.

The four licences cover four different regulatory perimeters. They overlap at the edges, but the centre of each is materially distinct. Map your product to the centre, not the edge.

An Electronic Money Institution is authorised to issue electronic money — pre-funded balances stored on a card, in a wallet, or against an IBAN — and to provide the payment services attached to those balances. The Electronic Money Directive sets the prudential perimeter; the Payment Services Directive fills in the operational obligations. Stripe, Wise, and Revolut all started life as EMIs.¹^[1]²^[2]

Initial capital is €350,000. Ongoing own funds is the higher of the initial capital floor or method-A/B/C calculated against e-money outstanding (typically 2% of average e-money outstanding). Client funds are safeguarded by segregation in a credit institution or by an insurance policy of equivalent credit quality. Client funds safeguarding is the operational test that NCAs inspect most frequently — a failure here is the fastest path to a supervisory letter.

EMIs can also provide every PI service. That is why EMI is the default choice for fintechs that combine e-money issuance with cards, transfers, FX, and IBAN issuance. The EMI licence passports across the EEA on the same notification mechanism as the PI licence.

A Payment Institution provides payment services without issuing e-money. The Payment Services Directive lists eight regulated payment services: cash deposits, cash withdrawals, transaction execution (covered/uncovered), card issuing, acquiring, money remittance, AISP, and PISP. A PI authorisation is scoped to one or more of these services; the capital floor depends on the scope.

PI is the right choice when you do not need to hold customer balances overnight. As soon as you do — gift card balances, prepaid wallet balances, stored-value accounts — the e-money definition is triggered and you need an EMI licence instead. NCAs scrutinise the boundary between PI and EMI carefully; running EMI activity under a PI licence is an enforcement event.

VASP is the pre-MiCA national registration regime introduced by the Fifth Anti-Money Laundering Directive in 2018, requiring crypto-asset exchanges and custodial wallet providers to register with their national AML authority. Each member state implemented this differently — Estonia and Lithuania built quick-onboarding regimes; Germany and Netherlands built rigorous ones. The result was 27 different national VASP regimes with no mutual recognition.⁴^[3]

Under MiCA, the VASP perimeter is being absorbed into the CASP regime. Member states activated transitional periods of up to 18 months from MiCA's full application on 30 December 2024. After expiry — most ending between 1 July 2026 and 30 December 2026 — every legacy VASP must hold a MiCA CASP authorisation to continue operating in the EEA.

A Crypto-Asset Service Provider authorisation under the Markets in Crypto-Assets Regulation passports across all 30 EEA member states from a single NCA grant. The licence covers eight regulated services across three classes (Annex IV), with prudential capital scaling with class: €50,000 for Class 1 (advisory/marketing), €125,000 for Class 2 (execution/exchange/transfer), and €150,000 for Class 3 (custody, operating a trading platform).⁵^[4]

On top of the class floor, CASPs must satisfy the fixed overhead requirement (25% of prior year's fixed overheads) and operate under the EBA Guidelines for ML/TF risk, the Transfer of Funds Regulation Travel Rule, and the Digital Operational Resilience Act ICT framework. AMLR will overlay a single EU AML rulebook from 10 July 2027.⁶^[5]⁷^[6]⁸^[7]⁹^[8]

The table below compares the four licences across the dimensions that drive the decision: regulatory framework, scope, capital, regulator, passport, timeline, and ongoing cost.

Pick the licence that matches the regulated activity at the centre of your business model — not the activity at the edge.

Annual regulatory operating cost varies by 5–10× across these licences. The drivers are: prudential capital (held but not deployable), ongoing supervisory fees, audit, MLRO and compliance headcount, and supplier stack (Travel Rule, blockchain analytics for crypto licences; transaction monitoring, sanctions screening for all).

The single biggest variable is whether the licence requires a crypto supplier stack. Travel Rule, blockchain analytics and crypto-aware transaction monitoring add €120,000–€360,000/year to a CASP — costs that simply do not exist for an EMI or PI not operating in crypto. Build the cost forecast around the supplier stack first, then add the regulatory headcount on top.

The European Commission proposed PSD3 and the Payment Services Regulation (PSR) in June 2023. The proposals merge EMD2 into the payment services framework, raise the AISP/PISP technical standards, and give the EBA expanded supervisory tools. Adoption is expected in 2025–2026 with application from 2027–2028. EMIs and PIs should expect: a unified payment services authorisation replacing the EMI/PI split, stronger client funds safeguarding requirements, and stricter outsourcing rules aligned with DORA.

On the AML side, AMLR overlays a single EU rulebook on every CASP, EMI and PI from 10 July 2027 — replacing the patchwork of 27 national AML laws. Direct supervision by AMLA covers ~40 highest-risk obliged entities; the rest stay under their home NCA but apply the AMLR substantive rules.

Yes — and this is the common architecture for retail crypto fintechs in 2026. A single legal entity can hold an EMI licence under EMD2 and a CASP authorisation under MiCA, both from the same NCA. The Bank of Lithuania has authorised this combination repeatedly. The two authorisations share governance, ICT, and AML infrastructure but maintain separate prudential capital and segregated client safeguarding accounts (one for e-money holders, one for crypto custody clients).

Only inside the transitional period and only in member states that opted into the maximum 18-month grandfathering window. The transitional period ends between 1 July 2026 and 30 December 2026 across member states. After expiry every CASP-perimeter activity requires a MiCA CASP authorisation — VASP registrations do not auto-convert. Several member states (Germany, Netherlands) opted for shorter windows. Plan a 9–18 month conversion programme starting now.

No — under MiCA, stablecoins are split into asset-referenced tokens (ART) and e-money tokens (EMT), each with its own MiCA authorisation regime. EMT issuers must be authorised as either an EMI under EMD2 or as a credit institution under CRD, plus separately notify the EMT under MiCA. ART issuers go through the MiCA ART authorisation directly. EMI is the simpler path for a single-currency fiat-pegged token.

By initial capital alone: PI (AIS-only) at €0, PI (money remittance) at €20,000, PI (PIS) at €50,000, CASP Class 1 at €50,000, then PI (general) and CASP Class 2 both at €125,000, CASP Class 3 at €150,000, and EMI at €350,000. By total programme cost (legal, supervisory, supplier stack, headcount), CASP is the most expensive non-bank licence because of the crypto supplier stack. EMI is cheaper than CASP unless you also need crypto activity.

Bank of Lithuania has historically been the fastest serious EMI regulator in the EEA at 6–12 months, followed by MFSA Malta and CySEC Cyprus. Central Bank of Ireland and BaFin are 12–18 and 12–24 months respectively. Speed correlates inversely with institutional credibility — the rigour of BaFin's review is the credibility you buy when you choose Germany.

No. PSD3 / PSR adoption is expected in 2025–2026 with application from 2027–2028. Existing EMI and PI authorisations will be grandfathered and converted to the new framework — there is no advantage to waiting, and the lost 18 months of operating capital outweighs any drafting risk. Apply now under the current regime; conversion will be administered by the NCA when PSD3 takes effect.

• MiCA Compliance Guide for CASPs: Authorisation walkthrough — capital, governance, supplier stack

• EEA vs UK vs Offshore: Where to Incorporate Your Crypto Business: Which jurisdiction maximises regulatory access and tax efficiency

• How to Get a Bank Account for a VASP or CASP: The 2026 banking playbook for regulated crypto firms

• AML Compliance for Crypto Firms: What the 6AMLD requires from CASPs and VASPs

Picking between EMI, PI, VASP and CASP is not a vocabulary exercise — it is a multi-million-euro architectural decision that locks in supervisor, capital, timeline, and customer base for the next decade. The fintechs that get this right combine licences deliberately (EMI + CASP for retail crypto, PI + CASP for institutional, MiFID II CIF + CASP for structured products) and pick a single NCA that authorises both ends of the combination. Get the licence right before you build the product.