ID 1066. Scope and definitions
e-money definition and server-based e-money
We would be grateful if you could please express your opinion on the clarification e-money definition regarding server-based (account-based) e-money.
The situation is: A company provides service enabling to pay for products or services of third parties using mobile phone with a NFC sticker. The company receives funds from payers in advance. These funds are deposited in a separated company’s own account in a credit institution. The transaction center of the company assigns these funds to the payer's virtual accounts in the transaction center. The payer initiates a payment transaction using mobile phone with a NFC sticker. The transaction center using a NFC sticker determines the payer and verifies whether funds are sufficient in the virtual account to make a payment transaction and approves it. Any payment transaction is accumulated and transaction center forms payment order to the credit institution to transfer funds to the payee’s account within time limits agreed between the company and the third party (payee).
Could we classify this situation as issuing of server-based (account-based) e-money?
Could you please clarify under what circumstances above mentioned activity wouldn’t be classify as issuing of e-money?
As stated in recital 8 of the E-money Directive, the definition of the electronic money should be "wide enough to avoid hampering technological innovation and to cover not only all the electronic money products available today in the market but also those products which could be developed in the future." It was the legislator's will not to give a an exhaustive list of criteria to classify an activity as issuance of e-money and to let the possibility to the supervision authorities in each Member State to decide on concrete situations, taking into account the technological progress and the specific market evolutions.
As for the second question, Art. 1(4) and (5) provides that the provisions of the E-money Directive do not apply to monetary value stored on the instruments exempted at the Art. 3 (k) of the PSD (Directive 2007/64/EC) or used to make payment transactions exempted at the Art. 3(l) of the PSD.