Sending money across borders has long been a test of patience. Traditional banks rely on legacy systems that were never designed for the speed and scale of global business today.
This is why Electronic Money Institutions (EMIs) are currently changing the market.
An EMI is a licensed financial entity that can issue electronic money, provide IBAN accounts, process payments, and hold client funds in safeguarded accounts. Unlike banks, EMIs cannot offer traditional loans or credit, but they can do almost everything else when it comes to facilitating digital payments.
Their advantage lies in flexibility: they are purpose-built for modern transactions rather than tied to decades-old infrastructure.
Across Europe, EMIs are growing in importance. In the UK alone, around 250 EMIs are authorized, safeguarding billions in client funds. In the EU, this model is being strengthened by upcoming regulation (PSD3) which will place EMIs on more equal footing with traditional banks when it comes to payment services and consumer protection.
Challenges in Traditional Cross-Border Payments
Despite globalisation, sending money across borders is often still too slow, expensive and sometimes downright opaque. The G20 has highlighted four stubborn problems: cost, speed, transparency and access.
- High costs: Fees accumulate at every step (because of correspondent banks, currency conversion, intermediary charges), making small or frequent transfers inefficient.
- Delays: Transfers can take days because they pass through a chain of intermediaries, each relying on legacy systems and manual processes.
- Limited access: Many regions remain underserved, leaving individuals and businesses excluded from financial flows.
- Lack of transparency: It’s common for senders to lose track of fees, exchange rates, or even the status of the transfers.
On top of all of this, regulatory fragmentation makes compliance quite difficult. Different jurisdictions impose their own rules on AML (anti-money laundering), KYC (know-your-customer), and tax reporting. That’s why it’s pretty common for international businesses to have to maintain some sort of balancing act. They have to stay compliant without slowing down their operations in order to survive.
How Trumia Simplifies Cross-Border Payments
This is where EMIs demonstrate their value. By design, they focus on reducing friction in the payment process while keeping compliance front and center.
Faster, more flexible rails
EMIs don’t have to depend on legacy correspondent banking networks. In fact, they can connect directly to payment schemes like SEPA or SWIFT, but also build their own digital rails if needed. This is how they enable near-real-time transfers.
For businesses this type of speed translates into improved cash flows. For individuals, on the other hand, it means transfers that feel as simple as sending a local payment. A win-win for everyone involved.
A better user experience
The standard features of an EMI (and what makes user experience far better) are digital onboarding, multi-currency wallets, and intuitive account management. Instead of juggling multiple bank accounts in different countries, clients can hold and send funds in multiple currencies from a single interface. It’s hard to beat this type of convenience. For users, this equals to significantly less paperwork, fewer intermediaries, and a clearer view of costs.
Compliance built into the process
EMIs integrate compliance checks (KYC, transaction monitoring, AML screening) directly into their systems. With the arrival of PSD3 in Europe, standards for EMIs will align with banks. Now, there will be even more consistency in consumer protection and supervision.
Security and trust
One of the best aspects of an EMI is that all customer funds must be held in safeguarded accounts. They have to be fully separated from the institution’s own funds. This particular requirement builds a lot of trust, especially as EMIs handle more cross-border volumes.
The numbers actually back this up: in the EU and UK, customer funds safeguarded by EMIs roughly doubled in just four years, reaching over €35 billion.
Future Trends in Cross-Border Payments via EMIs
The role of EMIs in international payments is only going to get bigger. In Europe, all eyes are on PSD3, the new framework that will tighten supervision while putting EMIs on a more level playing field with banks. For clients, this shift means greater stability and trust in using EMIs for serious cross-border operations rather than day-to-day transfers.
At the same time, the payment infrastructure itself is evolving. Europe’s Wero wallet, born out of the European Payments Initiative, is a step toward a continent-wide instant payment system. For EMI’s, plugging into this kind of network means finally offering users a single, seamless experience across multiple countries.
The changes aren’t limited to Europe. Africa’s Pan-African Payment and Settlement System (PAPSS) has already shown how dramatically costs can fall when local currencies are exchanged directly, bypassing the dollar and other intermediaries. Similar ideas are spreading in Asia and Latin America, suggesting that EMIs could become the connectors between these regional systems.
Also, it’s important to note that technology will probably push things even further. Artificial intelligence is already being used to streamline compliance checks and liquidity management. EMIs are in a strong position to adopt these tools quickly because they aren’t weighed down by legacy systems.
Add to that the possibility of new non-SWIFT networks emerging from geopolitical tensions, and EMIs could find themselves acting as crucial bridges, keeping global money flows open even in a fragmented financial landscape.
Read more:
Cross-Border Payments Simplified: The EMI Advantage With Trumia