The Electronic Money Directive: Recapitulation and outlook

A working paper for the GTIAD-meeting of November 27, 2003

On November 24, 2003, 1.1a2, Association for e-money issuers in the Netherlands, published its working paper on the Electronic Money Directive. The paper discusses the development of the EMI-directive, the implementation issues in the Netherlands and provides an outlook for the future. 1.1a2, chose to publish this paper in order to contribute to a proper European discussion about the way the EMI directive is implemented by regulators/supervisors in the various member states of the European Union.

On this page you can read the summary or download the Word document (199 kB).


1. On November 27, 2003, a GTIAD meeting will take place on the interpretation and implementation of the E-money Directive. Although this Directive has been implemented in EU member states, there still appears to be a discussion as to the applicability of the e-money concept on specific types of systems. The GTIAD now faces the challenge to advise on the interpretation of the concept of e-money and e-money institution.

2. 1.1a2, the Association for E-money Institutions in the Netherlands, is the representative organisation for e-money issuers in the Netherlands. It envisages an e-money market of:
- credit institutions offering e-money products,
- e-money institutions offering e-money in remote e-wallets / m-wallets / ISP-wallets / cable-wallets
- technology providers, supplying white-labelled e-money solutions.
Already we see this market developing, both nationally and in Europe.

3. One of the main legal problems in the Dutch market is still the un-equal treatment of mobile telecom operators offering e-money and those that use other channels (Internet or e-money card sold through retail outlets). Thus, some non-regulated operators make considerable profits while others have little income and bear the cost of supervision and complying with supervisory rules.

4. In order to help create a level national and European playing field, 1.1a2 aims to contribute to the current discussion on e-money by providing both a historical overview on the E-money directive and an outlook on the e-money systems in the future. We think such an approach may be useful, in order to see that many arguments that are now on the table, already were presented earlier, were taken into account and actually led to the current lightweight regime for e-money issuers. In addition, the approach shows the pivotal role of a technology neutral approach.

5. 1.1a2 recognizes that both institutional and market players may view the GTIAD-meeting as a way to influence a regulatory debate in their own interests. However, we would like to stress the need to respect the agreed institutional roles and procedures. The EMI-directive was promulgated. Local regulators have implemented it in various ways. And supervisors are now working on the basis of these local legal frameworks. The current role and competence of the GTIAD is only to clarify the meaning of the two central concepts in the e-money debate: electronic money and electronic money institutions. Having done so, determining the consequences for local regulation are an issue for the local regulators and subsequently affect the conduct of the competent supervisors.

6. As a consequence of the above, 1.1a2 rejects all suggestions in the debate that come down to agenda coupling (trying to solve the issue by linking it to the discussion on the legal framework in the single payments area) or industry specific lobby-efforts (trying to get an industry specific or technology specific exemption). It should be noted that most of the main e-money players of the future (ISP's, cable providers, etc) are currently not present at this meeting, although the outcome will be of significant relevance to them. Still, the decision of the GTIAD should also reflect those interests. In order to make sure that all future occurrences of pre-paid payment mechanisms (and whether or not these classify as e-money) are taken into consideration, we have provided a framework that may be helpful.

7. 1.1a2 notes that the GTIAD-advice will be a historical one for many reasons. It will not only clarify the legal framework for e-money players, but will also set an incentive structure for the conduct of market players and regulators. We hope that the decision will signal to all players, the benefits of acting timely, consciously and properly in the light of foreseeable EU-regulation. If -by any chance- the decision would favour different conduct, it may be detrimental not only for the development of the e-money market at hand, but also for the legitimacy of the European Union and all it stands for.

If you wish to react to this paper or would like more information on 1.1a2, we welcome your response by e-mail.

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