ID 1236. Emoney protection and regulation
General question on
Could you explain to me in simple terms how the e-money directive works please. For example if I was to purchase a Gift Card online it is understood to come under e-money rules. If the place where I purchased the Gift Card was to close, for eg Post Office - One4All Gift Card would any money held on this card be totally protected and returned to the customer?
Is this an 'opt-out' scheme that retailers do not need to sign up to and if this is the case then do I have to check which retailers are members BEFORE I buy?
The purpose of Directive 2009/110/EC is to establish clear rules for the issuance of e-money to protect e-money holders against financial risks of entities engaging in such activity. Therefore, apart from credit institutions, post giro institutions and under certain conditions national and local public competent authorities, only e-money institutions that are licenced are allowed to issue e-money. The Member States are obliged to keep a public register of all authorised e-money institutions, to allow consumers to see if the institution concerned is licenced to engage in such activity.
The e-money institution can distribute e-money through natural or legal persons, such as retailers, on their behalf. If a legal person, acting on behalf of the e-money institution is no longer active (e.g. due to bankruptcy), the electronic money holder can still approach the issuer concerned, to ask for a full redemption of the monetary value of the electronic money held.
According to Article 1(4) of the Directive in conjunction with Article 3(k) of Directive 2007/64/EC on payment services, the Directive does not apply to monetary value stored on specific pre-paid instruments, designed to only be used within a limited network. However, these specific instruments enter within the scope of the Directive if they develop, as stated in recital (5), into general-purpose instruments "designed for a network of service providers which is continuously growing".
We do not know what the situation is with regard to the One4All Gift Card you refer to. It is for the national authorities to analyse and decide based on the business models used if the issuer of these gift vouchers can be excluded or not from the application of the Directive, and thus whether or not the issuer requires a licence to engage in such activity.
If you would like to know which retailers accept the One4All Gift Card, you are advised to directly contact the issuer of these gift cards.