The widespread adoption of digital payments has profoundly changed the way businesses operate, manage cash flows, and provide services to customers. In this context, understanding what digital currency is and how electronic money (aka e-money) works in Italy is necessary for any company looking to innovate.

This article examines what e-money is, the differences between e-money and virtual currency, and the role of Electronic Money Institutions (EMIs). We’ll explore what you can do with an EMI license in Italy, when it makes sense to apply for one, and how to obtain it, with a focus on the Italian and European regulatory frameworks. Lastly, we’ll take a look at the tools and infrastructure required to operate with e-money, so you can choose the option that best fits your business model.

What’s in this article?

• What is e-money?
  
• Use of e-money in Italy: Data and trends
  
• What’s the difference between e-money and virtual currency?
  
• What is an electronic money institution (EMI)?
  
• What can you do with an EMI license in Italy?
  
• Italian and EU regulatory framework
  
• When should you apply for an EMI license?
  
• How to apply for an EMI license
  
• Technological infrastructure required for EMIs—and how Stripe can help you
  

What is e-money?

E-money is a form of digital currency that you can use via devices such as smartphones, tablets, or computers to make or receive payments without using cash.

It’s therefore an alternative to physical cash: instead of paper money or coins, the value is stored digitally and can be used to purchase goods and services, both online and in physical stores. A typical example of e-money is the balance available on a prepaid card or in a digital wallet.

It’s important to note that e-money in Italy is not created freely, but is issued by authorized entities, such as banks and EMIs. These operators convert traditional money into digital form, enabling businesses and customers to make e-money payments in a secure and regulated manner.

What are the different types of e-money?

The main types of e-money include:

• Prepaid cards (reloadable or single-use)

• Digital wallets (smartphone apps for payments and transfers)

• Payment cards (credit cards or debit cards used in digital form)

• E-money accounts offered by EMIs (nonbank digital accounts that allow users to store e-money and use it for payments, transfers, and online purchases)

All of these tools are designed to facilitate payment by e-money without the need for cash.

Use of e-money in Italy: Data and trends

The use of e-money in Italy has grown significantly in recent years, becoming an increasingly common consumer habit. According to the Innovative Payments Observatory of the Polytechnic University of Milan, in 2025, digital payments in Italy reached a total transaction volume of €518 billion, up 7% from 2024. This confirms that payments by e-money are now a structural component of the economy.

Following the historic shift away from cash in recent years, the payment system continues to evolve: Today, 45% of consumer spending in Italy is done using e-money payment methods, whereas cash accounts for just 38%. Bank transfers and direct debits from bank accounts also continue to grow, now accounting for 17% of the total.

This data demonstrates that e-money in Italy is no longer merely an alternative to cash; rather it’s the primary method by which businesses and customers manage payments. For companies, this means offering electronic payment solutions is necessary to remain competitive and meet market expectation.

What’s the difference between e-money and virtual currency?

In everyday language, the terms “e-money” and “virtual currency” are often confused, but they refer to very different tools. Understanding the distinction is important for selecting secure and compliant payment solutions. Let’s examine the key characteristics of each.

E-money

E-money is a regulated tool designed to facilitate secure and traceable digital payments. A typical example is the balance on a prepaid card or in a digital wallet. E-money is widely used by businesses and customers in daily operations and has the following characteristics:

• Serves as a digital version of traditional currency (such as euros)

• Is issued by an authorized entity, such as a bank or EMI

• Is regulated and supervised by authorities (in Italy, by the Bank of Italy)

• Represents a claim against the issuer

• Has a stable value because it’s pegged to an official currency

• Can be used to make secure payments online and in store

Virtual currency

Virtual currency, on the other hand, falls into a broader category of digital assets, which are often characterized by greater autonomy from the traditional financial system and by varying levels of regulation. Examples include cryptocurrencies or other digital assets. In practice, virtual currency:

• Has a value that’s not necessarily tied to an official currency

• Is not issued by a central authority or authorized entity

• Is not always subject to comprehensive regulation

• Does not represent a claim against an issuer

• Might have a value that’s volatile and variable over time

In summary, e-money is a regulated instrument designed for everyday payments, whereas virtual currency falls into a broader and less standardized category. For a business, this distinction is key for operating within a clear regulatory framework and offering customers reliable payment methods.

What is an electronic money institution (EMI)?

An EMI is a financial intermediary authorized to issue e-money and provide payment services. Essentially, it’s a regulated entity that can convert traditional currency (such as euros) into digital form and make it available to users through tools such as wallets, prepaid cards, or payment accounts.

An EMI issues e-money only upon receipt of funds. When a customer loads money onto an app or card, that amount is converted into e-money and can be used to make a payment.

EMIs operate within a specific regulatory framework and are authorized by the Bank of Italy (or by other European authorities, if established in the EU). This means they must meet strict requirements regarding capital, governance, cybersecurity, and anti-money laundering.

Unlike banks, EMIs cannot use customer funds for lending activities and must instead ensure their protection—for example, by keeping them separate from their own assets—in accordance with the safeguarding requirements set forth in the legislation.

In summary, if you’re wondering who can issue e-money, the answer is: only authorized entities such as banks and EMIs. For businesses, EMIs provide the infrastructure that enables them to offer digital payment services in a compliant, scalable, and secure manner within Italy’s e-money market.

What can you do with an EMI license in Italy?

Obtaining an EMI license in Italy (also known as an e-money license) unlocks a host of opportunities for businesses. With a license, you can:

• Issue e-money (such as wallets or prepaid cards)

• Offer digital payment services

• Manage payment accounts for customers

• Facilitate direct payments using e-money

A practical example of e-money is that of fintech companies that offer apps for payments and money management. In this case, e-money in Italy becomes a strategic tool for developing new business models.

In addition, the license allows companies to operate in other EU countries as well, thanks to the “European passport,” a mechanism that enables them to offer services throughout the EU without having to apply for a new authorization in each individual country.

Italian and EU regulatory framework

E-money in Italy is primarily regulated by the Consolidated Banking Act (TUB) and by European directives, including the revised Payment Services Directive (PSD2) and the e-money directive.

Legislation clearly defines e-money and sets forth the requirements for operators. The Bank of Italy is the competent authority responsible for authorizing and supervising EMIs.

When comparing e-money and virtual currency, it becomes clear that the former is subject to a well-defined regulatory framework, whereas the latter is governed by more recent regulations, such as the European Regulation on Crypto-Assets (MiCA).

For businesses, this means that operating with e-money in Italy requires compliance with regulations regarding:

• Anti-money laundering (AML)

• Data protection

• Payment security

• Customer protection

When should you apply for an EMI license?

Not all businesses need to become EMIs. It makes sense to apply for a license when:

• You want to directly control the issuance of e-money

• You offer innovative financial services

• You have high transaction volumes

• You want to create a proprietary payment environment

For instance, a marketplace platform might want to manage payment flows using e-money internally in Italy. However, it’s important to consider the costs and complexity involved. In many cases, working with a provider that’s already licensed is more efficient.

How to apply for an EMI license

Applying for an EMI license in Italy is a complex process that requires authorization from the Bank of Italy. This is not merely an administrative procedure, but a thorough evaluation of the soundness and reliability of the business venture. To initiate the application, you must submit a comprehensive set of documents that includes the following items:

• A detailed business plan
  
• A description of the services you intend to offer
  
• Organizational structure and governance
  
• Technology systems and IT infrastructure
  
• Risk management procedures
  
• Anti-money laundering and payment security policies
  

It is important to demonstrate that the company has the necessary expertise, both at the managerial and operational levels.

Another important factor is the initial capital, which must be commensurate with the type of activity (generally at least €350,000, as stipulated in Article 4 of Directive 2009/110/EC), along with the ability to ensure the protection of customer funds, which must be kept separate from the company’s assets.

Once the application has been submitted, the Bank of Italy initiates an evaluation process that can include requests for additional information and further clarification. The goal is to verify that the company is able to operate safely, transparently, and in compliance with the law.

Obtaining an EMI license therefore requires time, resources, and significant preparation. For this reason, before embarking on this path, it’s important to carefully assess whether your business model justifies the investment or whether there are faster and more efficient alternatives for offering payment services.

How long does it take to obtain an EMI license?

The timeline for obtaining an EMI license in Italy depends on several factors. Legislation stipulates that authorization be issued within approximately 90 days of submitting a complete application, but in practice the process can take longer—potentially even several months—due to requests for additional information and the complexity of the review process, which can depend on various factors, such as:

• Completeness of documentation
  
• Company structure
  
• Level of project innovation
  
• For many businesses, this lengthy timeline represents a significant barrier to entry into the e-money market in Italy.
  

Technological infrastructure required for EMIs—and how Stripe can help you

In technological terms, operating with e-money requires:

• Secure payment infrastructure
  
• Wallet management systems
  
• Integration with payment networks
  
• Compliance and monitoring tools
  

Building this stack internally can be costly and complex. For this reason, many companies opt for alternative solutions such as Stripe. With Stripe Embedded Finance, you can integrate financial features directly into your products without having to obtain an EMI license.
Stripe offers compliant, scalable infrastructure, allowing you to manage payments, wallets, and cash flows without having to become a direct issuer of e-money. This enables you to deliver advanced e-money payment experiences while reducing time, costs, and complexity.

Learn more about Stripe Embedded Finance or get started today.