WHAT DOES THIS DIRECTIVE DO?
- The electronic money directive (EMD) sets out the rules on the business and supervision of electronic money1 (e-money) institutions in order to contribute to the emergence of a true single market for e-money services in the European Union (EU).
- It also seeks to ensure consistency with the EU’s payment services directive (Directive 2007/64/EC, known as the PSD), thus contributing towards a single EU market for payments for the benefit of consumers, business and the wider EU economy.
KEY POINTS
In general, the EMD aims to:
- facilitate the emergence of new, innovative and secure e-money services;
- provide market access to new companies;
- encourage effective competition between all market participants.
Specifically, it modernises EU rules on e-money, in particular bringing the prudential regime for e-money institutions2 into line with the requirements for payment institutions in the PSD.
It introduces proportionate prudential requirements in order to ease market access for newcomers. This includes reducing the initial capital requirement to €350,000 and new rules on calculating own funds.
The institutions covered by the EMD include banks, e-money institutions, the European Central Bank and national central banks.
The activities which e-money institutions are permitted to carry out include providing payment services and granting credit related to these payments.
In October 2015, the EU adopted a new directive on payment services known as PSD2. It repeals Directive 2007/64/EC with effect from 13 January 2018. PSD2 aims to improve security, widen consumer choice and keep pace with innovation.
FROM WHEN DOES THE DIRECTIVE APPLY?
It applies from 30 October 2009. EU countries had to incorporate it into national law by 30 April 2011.
BACKGROUND
European Commission website on e-money
KEY TERMS
- Electronic money is the digital alternative to cash, which enables users to store funds on a device (card or phone) or through the internet and to make payment transactions.
- E-money institutions are organisations that have been authorised to issue electronic money.
ACT
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 amending Directives 2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC (OJ L 267, 10.10.2009, pp. 7–17)
RELATED ACTS
Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive 97/5/EC (OJ L 319, 5.12.2007, pp. 1–36). Successive amendments to Directive 2007/64/EC have been incorporated in the original text. This consolidated version is of documentary value only.
Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC (OJ L 337, 23.12.2015, pp. 35–127)
