EMI vs bank account: what startup founders should know

When founders look for somewhere to run company money, they quickly hit a choice that is not always explained well: a traditional bank, or an electronic money institution (EMI). The two can look similar from the outside, but they are different kinds of provider.

This guide explains what an EMI is, how it differs from a bank, why founders consider one, and what to check before you decide. It is general information, not a recommendation about any specific provider.

What is an electronic money institution?

An electronic money institution, or EMI, is a regulated provider authorised to issue electronic money and offer payment accounts and related services. Altery is an FCA-authorised EMI. An EMI is not a bank, and an EMI account is not a bank account, even though both let you hold a balance and send and receive payments.

The core difference is in the model. A traditional bank takes deposits and lends a portion of that money out. An EMI does not lend out customer money; it focuses on holding balances and moving payments. This is a factual difference in how the two operate.

Why founders consider an EMI

EMIs grew up serving exactly the cross-border, fast-moving companies that traditional banking can struggle to onboard. Founders tend to weigh up:

• Onboarding speed. Applications are usually online, without a branch visit for every director.
• Multi-currency. Holding and moving several currencies in one place suits companies that sell or operate across borders.
• Built for non-residents. Foreign founders and cross-border ownership structures are a normal applicant rather than an edge case.
• Modern tooling. Online controls, multiple users, and integrations are often part of the offering.

Can an EMI account be your main account?

For many startups an EMI account works as the day-to-day account: receiving payments from customers, paying suppliers, running payroll, and settling obligations such as tax payments. It has account details for sending and receiving money in the usual way.

There are still things worth checking against your own needs. Some products and arrangements have historically been associated specifically with banks — for example certain types of lending or particular cash-handling services — so if you rely on something specific, confirm it is supported before you commit. The right answer depends on how your business actually operates.

How customer funds are handled

An EMI does not lend out customer money the way a deposit-taking bank does; it concentrates on holding balances and processing payments. Exactly how funds are held is set out in each provider's own terms and disclosures.

If precisely how and where your money is held matters to your decision — and for many founders it does — read the provider's published terms rather than relying on a general guide, and raise any questions with them directly before you open an account.

What to check before choosing

Rather than asking which is better in the abstract, match the provider to how your company runs. Useful questions:

• Which currencies do you need to hold and move, and are they all supported?
• Can you complete onboarding given your founders' locations and your ownership structure?
• Does it support the specific payments you depend on, such as payroll and tax payments?
• What fees and FX charges apply to the transactions you will actually make?
• What do the provider's own published terms say about how funds are held and protected?

Working through these against your real operations tends to make the choice clearer than any general comparison.

Frequently asked questions