Monday, November 24, 2003

Whereto with the E-money directive?

This week the GTIAD, the working group for interpretation and application of banking directives, will further discuss the application of the E-money Directive with respect to new payment services such as the pre-paid funds of telecom operators. As the 1.1a2 contribution to the discussion I've just drafted the document:

The Electronic Money Directive: Recapitulation and outlook, a working paper made for the GTIAD-meeting of November 27, 2003.

The main thesis in the paper is:

The European E-money Directive is the codification of a number of expectations with respect to the future role of both market players and regulators. These essential expectations are:

1- electronic money" is monetary value as represented by a claim on the issuer which is: (i) stored on an electronic device; (ii) issued on receipt of funds of an amount not less in value than the monetary value issued; (iii) accepted as means of payment by undertakings other than the issuer.

2- e-money is subject to regulation with a regulatory regime similar to that of banks, but specifically designed for e-money institutions,

3- all e-money issuers will be treated equal, the goal of the directive is to ensure a level playing field

4- the rules of the directive apply, regardless of the specific technology used.

One may assume that all European citizens, civil servants, institutions and enterprises adhere to the European principles and the democratic and institutional arrangement that they are subject to. Therefore, it is justified to expect that all market players and regulators will live up to the essential expectations mentioned above.

If however, it turns out that these expectations will not be met, due to decisions or actions by market players or regulatory bodies, this not only damages the level playing field for e-money products but also damages all the European Union stands for.

See for more info: