white label EMI

[void]

If I remember correctly there was a thread about running the own white label EMI solution. I think it was Martin Everson claiming it could be done for 60k + 30k yearly at that time (correct me if I'm wrong please).
What are the current options if one want's to run his own EMI for very limited number (up to 20 maybe) of trusted private customers? Private EU IBANs for sending and receiving funds in customer's own name needed, EUR only if it makes the whole thing easier, high volumes (5 figures per transaction), customers can only get in touch with the EMI operator (comunication, verification, documents) and not with the bank providing the underlying accounts/IBANs.
Anything like this doable today?

 

[otcable]

Yes, this is a trend that will get even more mainstream. Specially with emis that are integrating crypto, or the other way around, crypto platforms integrating payments/banks.

There is a good ebook (free) that you can check to see a global perspective on this topic made by the people of arival neobank. The correct term for looking into this is digital banks or neobanks.
For example @void quppy has a whitelabel solution for what they do. Same for the people behind bankera but not sure if they are aiming for that type of EMi you are asking.

 

[JohnLocke]

There is a good ebook (free) that you can check

Could you post a link to the ebook & other resources you may know about?

 

[otcable]

@Admin first edition of the ebook is free The First Fintech Bank's Arrival (book, pdf, 252 pages) by Vladislav … from the founder of arival bank Vladislav Solodkiy. The second "updated" edition is now sold on amazon.

Another good resource is this link : http://www.bank-as-a-service.com/

The main bullet points can be summarized but the answer to the trend has to do with providers and customers:

• Bank as a service: Easier to connect to licensed banks with apis than to get a license for a bank.
• Customers are mobile: Users are OK with managing money from cellphones and young enough to understand they do not need to make a line to talk to a bank.

Like internet startups, fintech banks started a race to have users, not to make money. They had big venture capital pockets to lose money until they wait for the trend to become real. That seems to have stopped with fintech banks raising fees and stopping the *freemium* model.

 

[burden]

nice shares. is the estimated cost continued to be 60K euro to setup your own EMI ?

 

[otcable]

nice shares. is the estimated cost continued to be 60K euro to setup your own EMI ?

From the tech you could do this with less than 15k euro. On the legal side, I am not that sure, I know Estonia has good prices for licenses and is inside EU. I know most members here are used to bigger numbers but that is my experience.

 

[exprtadvisrdev]

From the tech you could do this with less than 15k euro. On the legal side, I am not that sure, I know Estonia has good prices for licenses and is inside EU. I know most members here are used to bigger numbers but that is my experience.

Where can I find an agency that does the tech part for less than 15k? I'm really interested

 

[void]

I'm sure there can be found several solutions (for more or less acceptable price) that provide the technical background. What I'm more interested in is the part that would guarantee certain level of autonomy in dealing with my client base - in other words solution for operation of a service where customers trust me (as a service provider) but don't trust the underlying bank providing the IBANs, accounts, cards etc. and don't want to share documents and communicate with anyone else.
I don't need a fancy website, self-care client zone, ten types of cards etc. - pretty basic functions, high volumes and privacy needed

 

[andres33]

I received this offer from a Vilnius lawyers last year. I copy a fragment
"....Agent must have a legal company within EU or EEA regions in order to start agency registration program.
1. Setup fee (in advanced)– 40,000 EUR Setup fee includes the license fee and all IT connectivity
costs
The deposit of 20,000EUR must be paid to xxxxxxx within of 10 days after the white label agreement
is signed. The rest sum of 20,000EUR must be paid after the Agent License is granted by the
Central Bank of Lithuania. If Central Bank of Lithuania declines the Agents application then
deposit of 20,000EUR will be returned to the Agent.

2. Monthly fee – 2,500 EUR covers all xxxxxxxx internal costs which relates to the system
support, transaction monitoring and processing transactions.
3. KYC – If agent has own AML team who performs own KYC checks on each its client and submit
all docs to xxxxxxxxx for a final approval then no fee is taken.
4. If Agent does not have own AML teal then xxxxxxxx can offer to the Agent an internal
compliance officer who will be sitting at xxxxxxxxx office and only work with an Agents
client/merchants’ applications. The compliance officer will cost 2000 EUR per month....."


Also I receive from other white labeler >>>> I copy a fragment >>>>>>
".....
Service Fee
Set-up fee (one-time) 10 000 Eur
Priority fee (one-time) 25 000 Eur
White Label operator subscription fee (monthly) 3 000 Eur
SEPA transfer (out) 1.5 Eur per transaction
SEPA transfer (in) free

Flow fee (monthly) 0.1% from incoming volume
Personal account maintenance fee (monthly) 5 Eur per account
Business account maintenance fee (monthly) 50 Eur per account
KYC procedure (monthly) 50 Eur per customer
KYB procedure (monthly) 200 Eur per customer......"

Here you have an idea

 

[void]

I received this offer from a Vilnius lawyers last year. I copy a fragment
"....Agent must have a legal company within EU or EEA regions in order to start agency registration program.
1. Setup fee (in advanced)– 40,000 EUR Setup fee includes the license fee and all IT connectivity
costs
The deposit of 20,000EUR must be paid to xxxxxxx within of 10 days after the white label agreement
is signed. The rest sum of 20,000EUR must be paid after the Agent License is granted by the
Central Bank of Lithuania. If Central Bank of Lithuania declines the Agents application then
deposit of 20,000EUR will be returned to the Agent.

2. Monthly fee – 2,500 EUR covers all xxxxxxxx internal costs which relates to the system
support, transaction monitoring and processing transactions.
3. KYC – If agent has own AML team who performs own KYC checks on each its client and submit
all docs to xxxxxxxxx for a final approval then no fee is taken.
4. If Agent does not have own AML teal then xxxxxxxx can offer to the Agent an internal
compliance officer who will be sitting at xxxxxxxxx office and only work with an Agents
client/merchants’ applications. The compliance officer will cost 2000 EUR per month....."


Also I receive from other white labeler >>>> I copy a fragment >>>>>>
".....
Service Fee
Set-up fee (one-time) 10 000 Eur
Priority fee (one-time) 25 000 Eur
White Label operator subscription fee (monthly) 3 000 Eur
SEPA transfer (out) 1.5 Eur per transaction
SEPA transfer (in) free

Flow fee (monthly) 0.1% from incoming volume
Personal account maintenance fee (monthly) 5 Eur per account
Business account maintenance fee (monthly) 50 Eur per account
KYC procedure (monthly) 50 Eur per customer
KYB procedure (monthly) 200 Eur per customer......"

Here you have an idea

both stories sound fine/acceptable... do you believe that this setup would bring you the desired autonomy which would justify the costs?
I'm still not sure who is providing the IBANs and who is responsible for AML issues

 

[Martin Everson]

If I remember correctly there was a thread about running the own white label EMI solution. I think it was Martin Everson claiming it could be done for 60k + 30k yearly at that time (correct me if I'm wrong please).

It can be done for less than that unless inflation has kicked in in 2020. You can use a White Label solution from Satchel Pay for example. Your just passporting there EU EMI license under their name as your chosen brand name in your new EU country of choice. They take care of platform, KYC, AML onboarding, telephone support etc. You get a website and support phone number and your own branding which you must pay for. You then juts bring the clients to the table and agree pricing, revenue split and pay for setup and a basic monthly fee. For 20 clients the circa 20k setup and I think a couple of thousand a month running cost you need to decide if it makes economic sense with your volumes in the end for both parties.

P.S You accept any risk to WL provider is risk to your entire business model sadly. These services from WL providers can also be discontinued overnight.

 

[void]

It can be done for less than that unless inflation has kicked in in 2020. You can use a White Label solution from Satchel Pay for example. Your just passporting there EU EMI license under their name as your chosen brand name in your new EU country of choice. They take care of platform, KYC, AML onboarding, telephone support etc. You get a website and support phone number and your own branding which you must pay for. You then juts bring the clients to the table and agree pricing, revenue split and pay for setup and a basic monthly fee. For 20 clients the circa 20k setup and I think a couple of thousand a month running cost you need to decide if it makes economic sense with your volumes in the end for both parties.

P.S You accept any risk to WL provider is risk to your entire business model sadly. These services from WL providers can also be discontinued overnight.

I understand but this model is not what I'm looking for...

I'm happy to pay a fixed sum for the autonomy in management of my clients base, KYC, AML, support and stability - otherwise there is no significant additional value compared to mainstream services for my potential clients - no revenue share possible, it's supposed to be a part of a more general business model, nothing based on fees per transaction etc.

maybe there is no way how to achieve that...

 

[andres33]

both stories sound fine/acceptable... do you believe that this setup would bring you the desired autonomy which would justify the costs?
I'm still not sure who is providing the IBANs and who is responsible for AML issues

The autonomy (complex word with a large interpretation expectrum), will be the autonomy that will permit you the white labeler, and they are conditioned by the corresponsal bank and its compliance. To get better autonomy you will need to setup a own EMI or sEMI in Lithuania because you will have as corresponsal bank the Central Bank of Lithuania. You wil don't need a tier bank. Lithuania is the few jurisdiction with direct corresponce with central bank. It's possible in Puerto Rico with fed but it's a very long and hard process. For that the majority of IFEs prefer to negociate with a private bank, to avoid to be standing at for 2 years or more before to be accepted by fed. If it will justify the cost it will depend of your hardship. Take is consideration that today a swiss private bank can take 1,8% minimum of your assets.

 

[void]

To get better autonomy you will need to setup a own EMI or sEMI in Lithuania because you will have as corresponsal bank the Central Bank of Lithuania

who can get this done for me and provide necessary (very basic) technical solution and guidance?

then my company will be regulated and overseen directly by CBoL? no one in the middle? where and by whom will be the particular accounts/IBANs maintained?

thanks

 

[Paper Chaser]

@Admin first edition of the ebook is free The First Fintech Bank's Arrival (book, pdf, 252 pages) by Vladislav … from the founder of arival bank Vladislav Solodkiy. The second "updated" edition is now sold on amazon.

Another good resource is this link : http://www.bank-as-a-service.com/

The main bullet points can be summarized but the answer to the trend has to do with providers and customers:

• Bank as a service: Easier to connect to licensed banks with apis than to get a license for a bank.
• Customers are mobile: Users are OK with managing money from cellphones and young enough to understand they do not need to make a line to talk to a bank.

Like internet startups, fintech banks started a race to have users, not to make money. They had big venture capital pockets to lose money until they wait for the trend to become real. That seems to have stopped with fintech banks raising fees and stopping the *freemium* model.

Is that supposed to be a bad sign? Or do they just struggle, because EMIs didn't achieve the breakthrough yet, which would basically mean they've been miscalculating anyways I guess.

 

[andres33]

who can get this done for me and provide necessary (very basic) technical solution and guidance?

then my company will be regulated and overseen directly by CBoL? no one in the middle? where and by whom will be the particular accounts/IBANs maintained?

thanks

You can find infos here How to obtain a licence. You will be regulated direct from CBoL and in the middle you have the law and your compliance team. But for more details you can check the link.
I got budgets and all the steps and all the requirements from 2 differents laws firms in 2019. I could send you perhaps in private? I don't know if its possible. I signed a privacity clause and I can't do it public.

 

[otcable]

Is that supposed to be a bad sign? Or do they just struggle, because EMIs didn't achieve the breakthrough yet, which would basically mean they've been miscalculating anyways I guess.

Well Wirex is crowfunding now after doing exactly the same last year with their "token". I don't know if it is a clear bad sign.
They might be looking to take advantage on this neobank trend.

 

[Martin Everson]

who can get this done for me and provide necessary (very basic) technical solution and guidance?

then my company will be regulated and overseen directly by CBoL? no one in the middle? where and by whom will be the particular accounts/IBANs maintained?

Maybe you could explain exactly why you want autonomy? It makes no economic sense to setup an independent EMI for up to 20 clients.

An EMI is a very very unprofitable business model as I have explained on multiple threads. It is a fantasy to want independence with one unless you have the volume or are a laundromat. That is the hard facts you will come to realize after doing your homework.

 

[void]

Maybe you could explain exactly why you want autonomy? It makes no economic sense to setup an independent EMI for up to 20 clients.

An EMI is a very very unprofitable business model as I have explained on multiple threads. It is a fantasy to want independence with one unless you have the volume or are a laundromat. That is the hard facts you will come to realize after doing your homework.

operating an own EMI is not the primary business targeting the profit on this case
it's a supportive service for set of clients that need to hold higher six figures in the balance and move significant portion of it on a daily basis without delays and and agenda - they will be generating profit only when feeling safe regarding their money and privacy - you can't do this with revolut or average bank - I need a full control (as much as possible) to gain the trust
legit business, believe or not

 

[Martin Everson]

you can't do this with revolut or average bank - I need a full control (as much as possible) to gain the trust
legit business, believe or not

Yes because there is a thing called compliance. This is fantasy stuff. When reality dawns on you that in 2020 you cannot do this any longer than perhaps you may adjust your expectations. Wouldn't every criminal love to move their money about and have full control of the AML and compliance process....oh wait that's what Eastern European EMI's setup by Russians do I forgot.

P.S Privacy is all but dead in banking/EMI's. I wouldn't be thinking along the lines of privacy in 2020 unless you opt for non-bank/EMI solutions sadly or masking transactions which is criminal.