EMI licence in Germany — the BaFin application under the ZAG

The German e-money authorisation is wider than its name. § 11(1) sentence 2 ZAG says the licence covers, beyond e-money issuance itself, the provision of payment services, the granting of credit under § 3, operational and closely related ancillary services, the operation of payment systems under § 57, and other business activities within EU and national law. That is why a German EMI application is not an add-on to a payment-institution file: it is a broader permission, with a different document list, a different capital figure and its own safeguarding provision. This walks through § 11 ZAG as drafted — what BaFin asks for, what the statute refuses on, and the two clocks that govern the decision.

1. What the authorisation covers

Under § 11(1) sentence 1 ZAG, anyone carrying on the e-money business in Germany without being an e-money issuer within § 1(2) sentence 1 nos 2 to 4 needs written or electronic authorisation from BaFin. Sentence 2 lists what the licence carries beyond e-money issuance:

• payment services;
• credit under § 3;
• operational and closely related ancillary services connected with e-money issuance or payment services;
• operation of payment systems under § 57;
• other business activities, within applicable EU and national law.

So an authorised E-Geld-Institut needs no separate payment-services licence. It inherits a power in the opposite direction: § 11(3) sentence 2 lets BaFin require an institution that also provides payment services or pursues other activities to hive those off or set up a separate undertaking for the e-money business, where they impair, or could impair, financial soundness or BaFin’s ability to audit it.

2. The application file: eleven imported items plus five of its own

§ 11(2) does not restate the document list. Sentence 1 imports § 10(2) sentence 1 numbers 2, 5 to 11, 13 and 15 to 17; sentence 2 adds five EMI-specific items. Reading only the payment-institution list produces both gaps and surplus.

Facts: a group reuses its German payment-institution template for an e-money filing, carrying across the § 10(2) nr 12 organisational section including the undertaking to review agents and branches at least annually. Rule: § 11(2) sentence 1 does not import nr 12; the EMI equivalent is § 11(2) nr 4, which requires the organisational picture plus e-money agents, branches and outsourcing but carries no annual-review commitment — while nr 3 requires safeguarding under two sections rather than one. Outcome: the file is rebuilt against § 11(2) itself, the surplus commitment is dropped and the real gap — § 18 — is closed before filing rather than in a completeness letter.

§ 11(2) sentence 3 requires evidence that the persons named under sentence 2 nr 5 are reliable and have adequate theoretical and practical knowledge, including management experience. Sentence 4 sets the board minimum: at least two Geschäftsleiter, but one suffices for undertakings of small size — often stated flatly as “two”. Sentence 5 applies § 10(2) sentences 2, 3 and 6, and § 10(3) and (6), by analogy.

3. Capital: EUR 350,000, and it has to be available in Germany

§ 12 lists grounds on which authorisation must be refused, and the capital rule sits inside it. Number 3 requires the means necessary for the business, in particular sufficient initial capital, to be available im Inland — in Germany. The amounts run EUR 20,000 (money remittance only), EUR 50,000 (payment initiation only), EUR 125,000 (the § 1(1) sentence 2 nos 1 to 5 services) and EUR 350,000 for e-money institutions under letter (d). Where the institution is also an institution under § 1(1b) KWG or a Wertpapierinstitut, the higher amount governs.

Number 2 is a separate and under-read test: refusal follows where the application lacks sufficient information or where the material submitted does not permit a positive overall assessment (“keine positive Gesamtbewertung zulassen”) — completeness and persuasiveness are different hurdles. Number 6 requires effective risk procedures and adequate internal controls; number 7 allows refusal where supervision would be impaired by group structures, opaque ownership or third-country law; number 10, where safeguarding under § 17 or § 18 is not sufficiently demonstrated.

4. Own funds after grant

§ 15(1) sentence 1 requires own funds that at no time fall below either the § 12 nr 3 initial-capital amount or the amount produced by the calculation in the regulation issued under § 15(3), whichever is higher; where the institution grants credit under § 3(4), own funds must stand in an appropriate relationship to the total credit granted. Sentence 4 gives BaFin a Korrekturposten power where the calculated figure does not adequately reflect the actual own-funds base, to be lifted once the conditions fall away.

§ 15(2) requires quarterly submission of the own-funds data to BaFin and to the Deutsche Bundesbank, and lets BaFin — on an assessment of business organisation, risk management, the Article 324 CRR loss database and internal controls — require own funds deviating by up to 20% from the solvency principles. The method itself, including the e-money calculation at 2% of average outstanding electronic money, sits in the regulation made under § 15(3): see own funds and initial capital.

5. Safeguarding has its own section for e-money

An EMI safeguards under two provisions. § 17 carries the general regime for payment-service funds. § 18 deals with funds received for the issuance of e-money by payment with a payment instrument: they must be safeguarded once credited to the institution’s payment account or made available under § 675s BGB, and at the latest five business days within § 675n(1) sentence 4 BGB after the e-money has been issued, with § 17 applying accordingly.

The five-business-day window runs from issuance, not from receipt — so a card-funded top-up whose settlement lags issuance has to be reconciled against the issuance timestamp. That reconciliation is what § 11(2) nr 3 asks the applicant to describe, and what § 12 nr 10 allows BaFin to refuse on.

6. Issuance and redemption under § 33

§ 33(1) requires e-money to be issued at the nominal value of the funds received and redeemed at any time, on request, at nominal value in legal tender; before termination the request may cover part of it. § 33(2) requires the redemption conditions, including any fee, to be disclosed before the holder is bound and stated clearly in the contract.

§ 33(3) permits a redemption fee only if contractually agreed, and only where redemption is requested before the end of the contract, where a fixed-term contract is terminated early by the holder, or where redemption is requested more than one year after termination — and the fee must be proportionate to actual costs. § 33(4) requires the entire balance to be redeemed where the request is made on termination or within a year of it, and adds a hybrid rule: where the institution also pursues activities under § 11(1) sentence 2 nr 5, a total amount claimed after termination is redeemed in legal tender if the e-money share was not known in advance. § 33(5) allows departure to the holder’s detriment only where the holder is not a consumer.

Facts: a German EMI runs a wallet alongside a non-payment loyalty balance on the same stored value, with terms charging a flat closure fee on any redemption. Rule: § 33(3) confines fees to three cases and requires cost-proportionality; § 33(4) sentence 2 requires the full amount in legal tender where the e-money share was not known in advance; § 33(5) blocks derogation for consumers. Outcome: the flat fee goes for redemptions on termination and within the first year, the fee is re-derived from actual cost, and the hybrid balance is split so the e-money share is always identifiable — two contract terms and one ledger change, cheaper before authorisation than after a review.

7. The decision clock, and what happens after grant

Through § 11(2) sentence 5, § 10(3) applies. BaFin must tell the applicant within three months of receipt — or, if the application is incomplete, three months from receiving all information necessary for the decision — whether authorisation is granted or refused. Sentence 2 is harder: if, within twelve months of receipt, sufficient information is still not available despite a request to complete the file within one month, the application must be rejected. The three-month clock is only as good as the completeness date; the twelve-month long-stop is absolute.

§ 11(3) sentence 1 allows authorisation subject to conditions within the purposes of the Act. § 11(4) requires notification without undue delay of any materially and structurally significant change affecting what was filed under § 11(2). § 11(5) blocks public-register entries unless the authorisation is proven to the register court, and § 11(7) extends paragraphs 1 to 5 to a transfer of a legal person’s seat into Germany under §§ 305, 320 or 333 of the Umwandlungsgesetz.

At grant: quarterly own-funds data under § 15(2), Bundesbank-routed reporting, § 43 GwG reporting via goAML, DORA, CESOP once thresholds are met, and passport notifications.

8. Questions we get asked

9. What to do, today

• Build the file from § 11(2), not § 10(2) — and add the § 18 safeguarding description explicitly, since § 11(2) nr 3 names two sections and § 12 nr 10 refuses on either.
• Evidence the EUR 350,000 as available in Germany, checking the higher-amount rule if any KWG or WpIG permission is in scope.
• Treat the DORA-wired items as engineering deliverables: § 10(2) nrs 5, 6 and 8 all cite Regulation (EU) 2022/2554 at application stage.
• Manage the completeness date, not the three-month clock, and diarise the twelve-month long-stop in § 10(3) sentence 2.
• Re-paper redemption terms against § 33(3) to (5) before filing, and decide the MiCA perimeter early — § 11(3) sentence 3 can confine the licence to Article 48 token issuance.

Related: PI licence in Germany · Which BaFin licence do you need? · Where to base your EMI · Own funds and initial capital · Safeguarding compared across the EU · E-money tokens under MiCA · EMI licence in Luxembourg · CASP authorisation in Germany · BaFin video identification — remote onboarding in Germany · The German reporting calendar · Buying an EMI or PI licence — change of control