The activities BaFin authorises follow EMD2 directly: issuance of e-money, redemption at par, distribution and redistribution through agents and e-money agents, and the full menu of payment services in PSD2 Annex I (account services, card acquiring, remittances, payment initiation, account information). A German EMI cannot take deposits or extend credit beyond the narrow EMD2 window for credit linked to a payment service, and cannot offer investment services without separate BaFin authorisation under the WpHG.

Statutory minimum initial capital is EUR 350,000 under Section 12 (1) ZAG (the EMD2 Article 4 floor, adopted into German law). Own funds are maintained on a continuous basis under one of the three EMD2 calculation methods; active issuers commonly fall under the volume-linked Method D, which scales required own funds to the average outstanding e-money over the prior six months. The institution must have at least two managers who are professionally qualified and reliable under Section 13 ZAG, with sufficient time for the role.

Customer funds are safeguarded under Section 17 ZAG. Until April 2025, that meant open trust accounts (offene Treuhandkonten) at a credit institution authorised in the EEA. The omnibus financial-sector legislation that took effect on 9 April 2025 removed the open-trust-account requirement and broadened the menu of safeguarding accounts available to German EMIs and payment institutions, including, in principle, accounts at the Bundesbank or another EU central bank, although the ECB’s January 2025 decision clarified that Eurosystem central banks will not in fact open Section 17 accounts for these institutions. The practical change is that BaFin now accepts a wider range of segregated-account structures at commercial credit institutions, with insurance or comparable financial guarantee remaining an alternative.

Any acquisition of a qualifying holding (10%, 20%, 30% or 50% thresholds, plus any move that hands the buyer control) requires prior notification to BaFin under Section 2c KWG, applied to ZAG institutions through Section 14 ZAG. The fit-and-proper assessment covers the proposed beneficial owners, the prospective managers and supervisory body, group structure, and the source and provenance of funds. BaFin consults the home supervisor of any EU-regulated acquirer. The assessment clock under the Joint Guidelines on prudential assessment of acquisitions runs sixty working days from a complete file, extendable in defined cases. The bottleneck for unprepared acquirers is the completeness gate, not the substantive review.

• Single-side mandate. We work for the acquirer. BaFin notices when the same broker name turns up on both sides of a transaction; the change-of-control file lands cleaner when the buyer arrives with independent representation.
• Banking-continuity first. Each German EMI we present has a live, named safeguarding-bank relationship that has been personally confirmed. After the April 2025 Section 17 ZAG amendment broadened eligible account structures, several smaller commercial banks re-opened to ZAG-institution clients, but the market is still concentrated enough that a frozen safeguarding account on closing day can stall a change-of-control approval for weeks.
• Statute literacy. Our diligence checklist is mapped section-by-section to the ZAG, Section 2c KWG, the BaFin–Bundesbank guidance notes on EMI authorisation, and Circular 08/2023 on product governance. If the acquisition thesis depends on a particular service mix (say, card acquiring scaled across the eurozone, or MiCA-EMT issuance under Article 48), we can tell you in the first meeting which targets in the German book are board-ready for it and which are not.