What is electronic money?
What is electronic money?

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • What is electronic money?
  • Electronically (including magnetically) stored monetary value as represented by a claim on the electronic money issuer
  • Issued on receipt of funds for the purposes of making payment transactions
  • Accepted as a means of payment by a person other than the electronic money issuer
  • Not excluded by regulation 3 of the EMRs
  • The limited network exclusion
  • The electronic communications exclusion

BREXIT: 11pm (GMT) on 31 December 2020 (‘IP completion day’) marked the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. Following IP completion day, key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see: Brexit and financial services: materials on the post-Brexit UK/EU regulatory regime.

BREXIT: UK is leaving EU on Exit Day (as defined in the European Union (Withdrawal) Act 2018). This has an impact on this Practice Note. For further guidance on the impact of Brexit on e-money requirements, see Practice Note: Impact of Brexit: Payment services and electronic money directives—quick guide.

A very simple definition of electronic money (e-money) is cash stored in an electronic form. A common example is PayPal, where you can open an account and receive and transmit money to numerous third parties and store money in your PayPal account.

The element of prepayment and the ability to store e-money is key. It also distinguishes e-money from other payment services.

For further information, see Practice Note: The regulated activity of issuing electronic money.

As technology continues to advance, there has been an increase in use of e-money and other forms of contactless and mobile payments. These may not all fall within the scope of the

Popular documents