Imagine living without a bank account. No safe way to save money. No simple way to receive a payment. No access to credit or a loan when you need it.
That’s daily life for over 1.4 billion people around the world. They work, they earn, they spend, but they’re left out of the financial systems that many of us rely on every day.
The traditional banking model hasn’t been able to reach them. So, they’re excluded.
But over the last few years, something has started to shift. A new wave of digital-first financial institutions is opening doors that were once closed. They’re called Electronic Money Institutions – or EMIs.
EMIs aren’t trying to fix the old system. They’re building something different. Faster. Simpler. More accessible. In this article, we’ll explore what EMIs are, how they work, and how they’re helping people take their first real step into the financial system.
What are EMIs?
An EMI is a licensed institution that issues electronic money, a digital form of currency that acts as an alternative to cash. When you make a payment through a mobile wallet or load funds onto a prepaid card, you’re using electronic money. It’s not cryptocurrency. It’s real money, held in digital form. When you top up an e-wallet or use a prepaid card, that’s electronic money in action.
How do they work?
The process is really straightforward. An EMI takes money from a customer and stores it electronically, letting that money be used for payments, transfers, and transactions, often in real-time, and typically at a lower cost than traditional banks.
EMIs don’t offer loans or hold your savings like a bank. Instead, they focus on helping people and businesses move money quickly, safely, and with fewer barriers. Think online payments, mobile wallets, cross-border transfers, and financial tools for freelancers or small businesses. That’s their world.
Because EMIs are built on modern technology, they’re often faster, more flexible, and cheaper to run than traditional banks. And that makes them especially powerful in places or communities where banking access has always been limited.
How are EMIs using technology to drive change?
When we talk about EMIs, we’re not just talking about digital wallets or mobile apps. We’re talking about how they’re using cutting-edge technology to completely reshape the way we handle money:
Real-time transactions:
We live in a world of instant messaging, instant streaming, instant everything. So why are some banks still making us wait between 1-5 days to move money?
EMIs said: “That’s not good enough.” Those same transactions don’t take days with these institutions, but seconds. They’ve designed systems that make instant payments possible, even if you’re sending to a completely different country or continent.
They’re now also embedding instant payment infrastructure to meet bold regulatory mandates, like the EU’s requirement that all banks offer SEPA Instant transfers. That means moving up to €100,000, across borders, in seconds, not hours, not days.
Open banking:
But speed alone isn’t the revolution. Open Banking is. Instead of locking your financial data behind walls, Open Banking gives you control. Want to use your banking data to get a better mortgage deal? Done. Want to track your spending across multiple apps? Easy.
With Open Banking, EMIs are tearing down the walls that traditional banks spent decades building. Like Tim Berners-Lee said, “Data is a precious thing and will last longer than the systems themselves.” Open Banking gives that power back to the people. Back to you.
API integration:
How do EMIs make it all work together? Think of APIs as translators. They let apps and systems talk to each other.
If you want your budgeting app, your EMI, your crypto wallet, and your phone to speak the same language and connect seamlessly with each other, APIs make that happen.This means faster innovation. Better features. And systems that work together, not against each other. Think Lego blocks. You can build anything when they fit together.
Biometrics and enhanced security:
Speed means nothing without security. And that’s where EMIs shine. They’re using biometric authentication (things like fingerprints, face scans, even voice recognition) as digital shields.
Passwords can be guessed. Biometrics, they’re you. And no one can copy that. Some EMIs even use behavioural biometrics – like how you type, or how you hold your phone – to detect fraud. Add in advanced encryption, multi-factor authentication, and real-time fraud detection, and what you get is trust, built into the system.
Safety doesn’t stop at technology either. EMIs operate under some of the toughest regulatory frameworks out there. They follow strict Anti-Money Laundering (AML) laws.They meet Know Your Customer (KYC) standards, not just once, but continuously. They use digital onboarding, AI-powered identity verification, and continuous monitoring tools to stay compliant, secure, and efficient. It’s the kind of compliance that speeds trust up.
How are EMIs promoting financial inclusion?
Let’s be honest. Traditional banking left too many people behind. If you didn’t have a credit history, a stable income, a permanent address, or if you simply lived in the wrong place, you were excluded. Financial services became a privilege. Not a right. EMIs are innovating and including.
Here’s how:
Mobile-first approach – reaching the unreachable:
The average smartphone today has more computing power than the machines that sent us to the moon. But what’s even more powerful is what EMIs are doing with that power.
They’re turning smartphones into bank branches. You don’t need to walk into a building.
You don’t need payslips, paperwork, or proof of address. You just need a phone, and a connection. And that simple shift is transforming lives.
For instance, in Africa digital wallets powered by EMIs have given millions access to send, save, and receive money, sometimes for the first time ever. Take OPay in Nigeria, for instance. With 35 million registered users, it supports SMS-based and app-based payments, even on basic phones. That’s critical in a country where 26% of adults remain unbanked.
Another example is M-Pesa which is the dominant mobile money service in Kenya and a global benchmark for mobile-first financial inclusion. It allows users to deposit, withdraw, transfer money, pay bills, and access microloans, all via mobile phones-even basic ones. M-Pesa’s reach extends to neighboring countries, with over 50 million users and a significant share of Kenya’s GDP flowing through its platform.
Onboarding the underserved with frictionless KYC:
Traditional banks often turn away people who can’t tick every box – utility bills, photo ID, proof of address. EMIs are flipping that model.
They use digital KYC tools like identity checks through selfies, e-signatures, and document scanning powered by AI. In just minutes, a street vendor, a gig worker or a refugee can get access to a digital wallet, a virtual card, even a multi-currency IBAN, turning bureaucracy into possibility.
Some key innovations in this space include:
Selfie verification: Some platforms use facial recognition to match a live selfie with an uploaded ID document. It takes seconds.
Document scanning: Advanced OCR (Optical Character Recognition) extracts data from ID cards and passports in real time. AI checks for holograms, watermarks, and microtext to detect fakes, ensuring fast onboarding without compromising compliance.
Liveness detection: Some tools go a step further, blocking spoof attacks and deepfakes using NIST Level 2 anti-spoofing technology. That means only a real, live human – not a photo or video – can complete registration. This is now used in digital onboarding flows across emerging markets and by global EMIs expanding into risk-sensitive sectors.
Cross-border finance – sending money, not losing it:
Now imagine this: You work hard abroad. You send money back home. But fees eat into your wages. Transfers take days. EMIs saw that and realised that it could be improved.
Today, they’re offering low-cost, near-instant cross-border payments. They’re using SEPA instant transfers, local payment rails, and crypto-fiat bridges to make sure money arrives faster, and stays intact.Because when you’re supporting family back home, every second matters. Every cent matters.
Financial literacy tools – not just access, but understanding:
Access without understanding is not empowerment. That’s noise. That’s why many EMIs go further, offering spending analytics, budgeting tips, and savings nudges built right into their apps. They’re gamifying good money habits. They’re nudging users to plan, not just spend.
They’re teaching, without preaching. Because real inclusion means people not only have money, but know how to grow it.
What challenges do EMIs face?
EMIs are pushing boundaries, but they’re not without their own:
Regulatory complexity: Unlike traditional banks, EMIs must navigate a patchwork of evolving rules across borders. From PSD2 in the EU to local licensing in emerging markets, compliance is mandatory and it’s expensive.
Trust and reputation: They don’t hold banking licenses, and that makes consumer trust harder to win. One bad actor in the sector can damage the perception of them all. Building credibility takes relentless transparency and bulletproof security.
Financial sustainability: Many EMIs operate with razor-thin margins. Balancing innovation with profitability, all while keeping services low-cost and inclusive,is one of the hardest equations to solve.
But here’s the point: Challenges don’t stop change.They sharpen it. If EMIs can overcome these hurdles, they won’t just complement the banking system but redefine it completely.
What’s next for EMIs – And why it matters
The story of EMIs isn’t just about payments or technology. It’s about possibility. Because when you give someone the tools to save, to send, to grow – what you’re really giving them is power. Power to participate. Power to plan. Power to build a future on their own terms.
EMIs aren’t a perfect solution. But they are a powerful one. They’re proof that financial systems can be reimagined to serve not just the few, but the many.
So the question isn’t if EMIs will shape the future of finance. It’s how fast we can support them to make that future more inclusive, more transparent, and more just.
And maybe one day soon, we’ll stop calling it financial inclusion. Because everyone will simply be included.
