The number of services that cater to the ever-increasing decentralized finance, and infrastructure is rising in tandem with the rising popularity of digital currencies and the blockchain-based platforms that support them. Startups in these emerging industries, on the other hand, need to think about applying for an EMI license to set up electronic money institution in order to include their services in the international and European financial frameworks and reach a wider audience.
Services for Card Payment and Processing Given the new 3DS2 regulations and rising fees charged by gateways like MasterCard and VISA, many businesses look for neobanks as an alternative to their payment and financial solutions.
Non-financial organizations will be able to provide customers with branded cards, as well as opportunities for cash out and funds storage if a BaaS is certified by an EMI license. With this emi license, BaaS-based businesses can accept direct bank transfers and significantly expand their payment options at lower fees.
Many BaaS solutions use a peer-to-peer lending model that encourages the use of digital currencies to bank deposits and credits, providing financial leverage and collateral in transactions.
Because the EMI license to set up electronic money institution anticipates the implementation of stringent regulations and oversight over cybersecurity and client identification, compliance-based services businesses in need of KYC (Know Your Customer) benefit from the license. The underlying KYC will increase transparency, reduce fraud, and reduce identity theft, thereby attracting new customers and retaining existing ones.
Following that, all businesses providing financial services are required to comply. Through its maintenance's stringent application and reporting procedures, the EMI license automatically ensures compliance with legal and regulatory standards.
The framework of the EMI includes numerous security layers designed to combat fraud and ensure proper risk management, making fraud reduction an essential part of a BaaS's success.
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