Deposits versus stored value
A bank takes deposits and lends them out. That lending is the core of the banking model and the reason banking licences carry the heaviest supervision.
An e-money institution issues stored value against funds it receives. It cannot lend those funds and cannot pay interest on them.
Protection of customer funds
Bank deposits are typically covered by a national deposit guarantee scheme up to a set limit. E-money balances are not.
Instead, e-money firms safeguard customer funds by holding them in segregated accounts or equivalent arrangements, so the money stays identifiable and separate from the firm's own assets.
Choosing between them
For payments, accounts, cards and currency conversion, an e-money institution is often faster and more focused.
For credit products, interest-bearing balances and deposit protection, only a bank fits. Many modern businesses use both, each for what it does best.
Have a question about your own setup?
Our team can walk you through the options for your business and markets.
Get in Touch