The revised E-Money Directive was formally adopted on 27 July 2009 and will take effect following publication in the Official Journal (expected to be in early August). Member states will have 18 months from publication to implement the directive into national law.
The key changes to be introduced by the new directive include:
- a simpler, technology neutral definition of e-money;
- establishment of a new prudential regime which will lower the initial capital requirements for issuing e-money to €350,000 (from €1 million);
- introduction of a new, float-based formula for determining ongoing capital requirements for e-money issuers, which can be selected by competent authorities as an alternative to the three formulas established under the Payment Services Directive;
- removal of the restriction on mixed business, allowing e-money issuers to conduct business other than just issuing e-money and related activities;
- ability for competent authorities to exempt e-money issuers from authorisation criteria if certain conditions are met, including where outstanding e-money falls below a €5 million threshold;
- clarification of redeemability requirements, maintaining the right for consumers to redeem funds in full at any time but allowing e-money issuers to charge a fee for redemption in limited circumstances provided the fee is commensurate with the actual cost of redemption;
- increase in threshold values beneath which e-money issuers need not comply with full due diligence requirements for anti-money laundering and anti-terrorist financing purposes, with thresholds to be set at a maximum storage value of €250 (for non-rechargeable devices) and at a maximum of €2,500 transacted over a calendar year (for rechargeable devices).
HM Treasury has published a summary of responses to its consultation on the directive received from a cross-section of industry bodies, credit institutions, mobile operators and consumer groups which indicates broad support for the new directive.
The revised directive will make it easier for e-money issuers engaged in other types of business activities, such as transport operators, mobile operators and retailers, to launch innovative services into the payments market.