Select a legislative/policy area

ID 1253. Issuance and redeemability Back

Relevant provisions
Article 19(2) of Directive 2009/110/EC

Question
Electronic money, as defined in point 2 of Article 2 of Directive 2009/110/EC of the European Parliament and of the Council of 16 September 2009 on the taking up,pursuit and prudential supervision of the business of electronic money institutions (*) where, if it is not
possible to recharge, the maximum amount stored electronically in the device is no more than EUR 250, or where, if it is possible to recharge, a limit of EUR 2 500 is imposed on the total amount transacted in a calendar year, except when an amount of EUR 1 000 or more is redeemed in that same calendar year upon the electronic
money holder’s request in accordance with Article 11 of Directive 2009/110/EC. As regards national payment transactions, Member States or their competent authorities may increase the amount of EUR 250
referred to in this point to a ceiling of EUR 500.

My questions are the following:
1. a limit of EUR 2 500 is imposed on the total amount transacted in a calendar year (please clarify the meaning of TRANSACTED in a calendar year; in other words for an e-money instrument what is defined or considered as a transaction
2. except when an amount of EUR 1 000 or more is redeemed in that same calendar year (please clarify the meaning of REDEEMED; does this include pulling outcash / withdrawing cash from i.e. ATM, bank etc or any debit transaction via the the e-money instrument?
please treat my request as urgnet.
thanking you in advance

Answer
Article 19(2) of the EMD2 amends the Directive on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (2005/60/EC) by including a definition of e-money for the purpose of determining if the rules of customer due diligence in that Directive are applicable. Where it is possible to recharge the device, the limit for e-money is set on EUR 2 500 on the total amount transacted in a calendar year, except when an amount of EUR 1 000 or more is redeemed in that same calendar year. The transacted amount refers to the amount that is deducted from the monetary value issued on the device for making payment transactions or cash withdrawals. As regards the redeemable amount, it is noted that under Article 11 EMD2 the electronic money holder is entitled to request that the e-money issuer redeems at any moment and at par value the monetary value of the electronic money held. The redeem ability of e-money is a right vis-à-vis the e-money issuer. It does not refer to the withdrawal of cash at an ATM provider.

Date
Submitted on 29/01/2014