If you’re an innovative company operating in the UK and Europe and want to open EMI accounts for you or your customers, you may be experiencing the following challenges:
Your bank can't support the volume of accounts you want to offer your customers or the speed you need because opening a bank account takes a lot of time.
As transaction volumes grow, it’s harder to reconcile all your payment activity from one account.
Getting an EMI or banking licence is time consuming and doesn’t align with your current finances, but you need a regulated solution to launch your services or product.
We sat down with our payment accounts expert to explain how offering EMI accounts can not only solve your challenges but also open the door to new possibilities. In this article we’ll cover:
Modulr enables companies of all sizes to open and manage EMI accounts for their customers, all through a single API. Need a pain-free way to add EMI accounts to your platform? Contact us today to get started.
How to open EMI accounts with Modulr
Modulr is a leading provider of payment account services for companies across Europe focused on growth. As a regulated electronic money institution (EMI), we can enable you to create and manage an unlimited number of EMI accounts compliantly all through our intuitive API. Modulr's technology enables you to embed EMI accounts and other payment solutions directly into your platform.
Each Modulr EMI account comes with a dedicated account number and sort code or IBAN so you and your customers can interact with payment schemes as you would with a traditional bank account.
Through Modulr's payment API, you can:
Access some of the fastest and most-popular payment systems in Europe
Leverage Open Banking’s powerful tools
Automate payment events (i.e., split payments) and reconciliation
Here’s how you can get started with Modulr’s EMI accounts in five steps.
1. Sign up with Modulr
The first step to accessing our EMI account tools is to become a Modulr customer. We’ll work together from the first conversation to understand your needs and how you can use our technology and expertise to bring your business goals to life.
When you join as a Modulr customer, you’ll receive a dedicated team of experts. This small “squad” of product, IT, compliance and business experts are there to help you make the most of our embedded payment products. They’ll assist you as you add EMI accounts to your platforms and will be there after you launch. They can assist with any questions you may have – including how you can use our other embedded payment solutions.
Ready to add EMI accounts with Modulr? Contact us now and get started on step one today
2. Onboard your customers to open EMI accounts
Once you've connected to and embedded our tech into your platform through our API, you can start onboarding and opening accounts for your customers.
As we offer EMI accounts under our regulatory authorisations, you need to follow certain standards, such as “know your customer” (KYC) and anti-money laundering (AML) checks, to open EMI accounts compliantly. If you’re a financial institution or have a legal requirement to do KYC/AML verifications, you’re probably already performing these checks.
Once you onboard your customer compliantly, you can create a profile for them in our system following our API guide.
3. Create an EMI account for your customer
Our systems run 24/7, so you can create an account at any time. You can open an EMI account for your customer directly from your platform thanks to Modulr's API. You can specify the currency (GBP, EUR, or both depending on your Modulr agreement) to generate a unique sort code and account number or IBAN. All accounts automatically connect to UK and European payment schemes.
4. Receive the details of the newly opened EMI account within seconds
As soon as we receive your request, our system will generate the EMI account. We’ll return the account details that instant over the API. From then on, you and your customers can use the account to submit and receive payments.
5. Manage your EMI accounts through our API
You can manage the EMI accounts for you and your customers through the API, including the blocking, unblocking or closing of an account.
Whatever actions you need to take, you can do it through our embedded account solution directly from your platform. Our system processes your request as soon as we receive it.
Are you a developer or technically minded? Get a first-hand look at our API with our sandbox.
Why it makes sense to choose Modulr as your EMI partner
Using a payment provider can be the best choice when you don't want to go through the lengthy requirements of becoming an EMI or bank or deal with legacy infrastructures that end up compromising your user experiences.
As an e-money institution, Modulr can help you set up, embed and open EMI accounts directly from your platform. Here's why our customers choose Modulr as their EMI partner.
Securely offer accounts to your customers through our EMI licence
Getting a banking licence is expensive and time-consuming. As a Modulr customer, you can offer accounts under our licence without needing to get your own regulatory approval beforehand.
Modulr can be a great solution if you're a scale-up that doesn't have the time or resources to go through a lengthy licencing procedure. Or, if you’re a startup, you can build your fintech product complete with individual accounts for your customers so you can get to market quicker without burning through your runway on a costly application process.
Let’s say you’re launching a new fintech app for small to medium-sized businesses. With Modulr, you can:
Embed your EMI account opening solution directly in your platform.
Create an account for each customer.
Move funds into and out of the account with our payment tools and rules.
Automate the entire process with our API.
You’ll do all of this – and get your first product to market – under our EMI licence, saving you precious time and resources so you can focus on your successful launch.
Non-fintech firms can also embed Modulr's EMI accounts into their platforms without needing to apply for their own licences. We offer KYC/AML services that you can embed in your system so you can onboard customers compliantly and quickly.
You can also add Modulr accounts knowing your customers' funds remain safe. We maintain licences with both the Financial Conduct Authority (FCA) in the UK and de Nederlandsche Bank in the Netherlands. And, in the UK, we store funds directly with the Bank of England.
Read more about how we handle customer funds here.
Open as many accounts as you need with Modulr within seconds
When it comes to opening accounts at scale, most traditional financial institutions aren’t up to the task. They can only issue a few accounts at a time, and each account opening will take days or longer.
We built our EMI account product with scalability and speed in mind. With Modulr, you can open as many accounts as you need. Once you’re set up as a customer, there’s no difference between opening one account or 10,000. The process is instant, allowing you to offer personal or business accounts to your clients without upending your existing customer experience or product designs.
For example, a lender can create an EMI account for each new borrower. Whenever the borrower repays the loan, they transfer the funds to the dedicated account, which means loans repayments reconcile instantly. The lender's finance team also receives a notification of fund settlement into that account so they don't even have to manually check if client funds have arrived, or sort through hundreds of payment transactions.
Check out how lenders like kennek use our EMI accounts and other payment functionality to take the growing pains out of scaling.
Create and manage accounts all through a single API connection
You can access all of our payment products – including EMI accounts – through our API every day. Our systems run 24/7, 365 days a year, so you can open accounts whenever you need to.
With Modulr, you can embed your EMI account opening into your existing interface, which lets you automate and control account management at any time, without having to contact a bank branch. You can create and modify accounts whenever you need to and not just when your bank is operating.
The benefits of this level of autonomy become apparent in business models which don’t always operate when banks do. Take a C2B marketplace that lets companies buy directly from consumers as an example. Their activity happens in the evenings and on the weekends. With our API, the marketplace can create an account for a new end-customer as soon as they onboard them, enabling the two parties to do business with each other right away.
Automate reconciliation with dedicated accounts and our API
Managing reconciliation is one of the biggest barriers to growth, especially when your finance teams have to match each bank transfer manually. Our API enables automation of reconciliation so your company can scale without overwhelming your finance department.
Each time a payment event occurs in a Modulr EMI account, you receive a message via a webhook. This notification allows you to update your accounting software or ERP. Since each EMI account has a dedicated ID or account number, your system and teams will know exactly which payment belongs to which customers.
The webhook notification can do more than just update your system, though. You can use it to:
Inform customers that a payment settled
Automate a process in your system
Let’s take the lending platform from our earlier example. Whenever a borrower pays into their EMI account, the lending platform automatically receives a message about the event through a webhook. The platform can then use this notification to update their accounting systems and push an email to the borrower confirming they received the funds, providing a better experience for finance teams and customers alike.
Do more than just create accounts with our embedded payments solution
We offer more than EMI accounts. Modulr can also give you access to a suite of embedded payment products that help you meet the growing demands of your end-customers. In addition to payment accounts, our embedded payment products include:
- Connectivity to multiple payment mediums, including SEPA Instant, Bacs, Direct Debit, and CHAPS.
- Faster Payments. With Modulr, you get direct access to the fastest payment scheme in the UK.
- Open Banking. Receive payments with less risk, and remove the hassle from recurring payments.
- Confirmation of Payee. Verify a new beneficiary account before making a payment to reduce errors and fraud risk.
- Cards as a Service. Instantly issue payment cards for your customers through our API.
Companies of all industries and sizes can access these products either as a complete package or as modular pieces.
For example, Hodge Bank uses our Confirmation of Payee (CoP) service to improve the payment experience for their customers by enabling them to verify their account at Modulr before sending a payment to it. This helps to reduce mistakes and loss of funds to fraudulent activities.
Whenever a customer pays into their account, HodgeBank’s system can verify the account details with CoP. If the details are incorrect, the fintech's customer can see if the details match, are a close match or don't match at all. This way, they can avoid transferring funds to the wrong account.
How Modulr’s EMI accounts put a growing platform on the pathway to success
A C2B marketplace was having trouble with slow payments. Buyers and sellers would meet in person to finalise the sale, but then had to wait for funds to move from the buyer's account to the seller's account, which could take hours. Since payment occurred outside their platform, they also lacked visibility on these transactions, relying on the buyers and sellers to inform them when payments were made.
The company turned to Modulr for help. Modulr proposed using EMI accounts to speed up the payment process and create fluid account-to-account payments. Under their proposal, the marketplace would:
Give each buyer and seller a respective EMI account
Let the buyers top-up their account for purchases through bank transfers or an Open Banking payment initiation
Settle payments between the two accounts instantly
Enable sellers to receive funds, which were instantly transferred to their bank account
Give the marketplace visibility on completed payments thanks to real-time notifications
The company implemented Modulr's suggestions and the results were immediate. Buyers and sellers could now make payments as soon as they agreed to the terms, with instant settlements. Buyers increased their turnover and sellers received a better experience, all thanks to Modulr’s EMI accounts and embedded payment solutions.
Which industries can benefit the most from EMI accounts?
From fintechs and lenders to marketplaces, merchant payment services, and payroll companies, any company in need of better payment solutions can use accounts from an electronic money institution (EMI) as they can help offer better customer experiences and a stickier product.
Depending on the e-money institution you use, EMI accounts can be your main solution to launching your startup or, if you're scaling your business, they can be a bridge to other payment products, such as account-to-account payments, account verification via CoP, card issuance, payment automation, local IBANs and more.
Based on our customers' experiences, here are the sectors where we’re seeing the most growth and potential for using payment accounts through EMIs.
EMI accounts can make loan repayments faster and easier for lenders.
Lenders create a separate EMI account for each loan when they issue it, which borrowers use for repayment. Since each EMI account is only for one loan, it is impossible for borrowers to transfer money to the wrong account. This makes reconciliation automatic, as the lender's finance department no longer needs to match payments to individual borrowers.
Wealth-building platforms use EMI accounts to create an account for each investor.
Investors use the account to make money transfers and start trading right away. When they sell their investments, the money goes back to their EMI account. Depending on the payment scheme the provider uses, deposits and withdrawals can happen almost instantly. This speed and certainty ensures that investor account holders never miss an opportunity because of payment delays.
Regulated financial services firms wanting to offer a complementary service
Existing financial institutions can use EMI accounts as a fast way to roll out a new product or enter another market. Modulr can offer accounts over API, which allows for easy integration and little or no disruption to existing user interfaces.
Growing businesses that need to improve their reconciliation process
EMI accounts can enable businesses with high transaction volumes to simplify reconciliation by issuing each customer a dedicated payment account. Whenever a payment event occurs, the company can know exactly which account it connects to. If the provider’s API allows it, companies can connect the accounts to their accounting software or enterprise resource planner (ERP) to further automate the reconciliation process.
As we’ve seen, EMI accounts are already changing businesses far and wide. Before you can see the benefits of these transformative tools in your business, you’ll need to implement them first.
Change the way you handle customer payments with Modulr’s EMI account solution
It’s clear that enabling EMI account opening on your platform can transform the way your customers make, manage and receive payments when using your services. Our embedded payment solutions and API are helping companies like yours build new products, improve their customer experience, and successfully enter new markets.
If you’re ready to make EMI accounts part of your product and an enabler of your success, we’re ready to help. Contact us today to get started.