Review of the regulatory environment relative to Money Transfer ...

As explained before, starting November 2009, e-money institution would be considered as apayment service provider regulated under the new Payment Service Directive and as such entitled todeliver payment services as defined by the Directive.Initial capital of e-money institutionDefined minimum capital is EUR 1 million (Article 4 § 1).Own funds must be at minimum of 2 % of the financial liabilities related to outstanding electronicmoney.C) Waiver (exemption)On a national basis, competent authorities can eventually waive the application of the e-moneyDirective to electronic money institutions on the following conditions (article 8):• If total amount of financial liabilities related to outstanding electronic money issued by aparticular e-money institution never exceeds EUR 6 million• Or if e-money issued by a dedicated institution is accepted as payment only by a limitednumber of undertakings meaning for example there is a close financial or businessrelationship with the issuing institution such as a common marketing or distributionscheme• And if maximum e-money stored by one bearer never exceed EUR 150D) Modifications proposed by the European Commission (COM (2008)627) on e-money DirectiveThe European Commission has made a proposal in October 2008 to review the existing e-moneyDirective. It must be pointed out that this proposal still needs to be approved by the EuropeanParliament and by the Council and so is not yet published for application. However it is expected tobe published in 2009 or 2010.The Directive will apply to mobile operator (telecom, digital or information technology device) exceptif the operator does not act as an intermediary between the payment service user and the supplier ofgood and services.New definition of electronic money (e-money)'Electronic money' is defined (Article 2) as a monetary value as represented by a claim on the issuerwhich is stored electronically and issued on receipt of funds, for the purpose of making paymenttransactions. This definition is covering all situations where the payment service provider issues apre-paid stored value in exchange for fundsHowever e-money Directive should not apply to pre-paid instruments that can only be used in alimited way, either because they allow the holder to purchase goods or services only in the premisesof the issuer or within a limited network of service providers under direct commercial agreementwith a professional issuer, or because they can only be used to acquire a limited range of goods orservices. An instrument should be considered to be used within a 'limited network' if it can be usedonly for the purchase of goods and services in a specific store, a chain of stores or for a limited rangeof goods or services, regardless of the geographical location of the point of sale 17 . This exemptiondoes not apply to money transfer.17 Examples of such instruments are store cards, petrol cards, membership cards and public transport cards andmeal vouchersRegulatory framework: Implementation of Mobile Money Transfer services - June 2009 -47