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European Parliament, 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) (2009/110/EC) (Oct. 30, 2009) (full-text) (the "eMoney Directive" or "Electronic Money Directive").


The eMoney Directive was introduced by the European Union in October 2000 to offer protective regulation that would not inhibit market competition (Directive 2000/46/EU). The original objective was to encourage innovation and allow non-banks to enter the e-money market, particularly with the emergence of early e-money systems. For this purpose, the regulation allowed the creation of new institutions, called "electronic money institutions" (ELMI) with lighter regulation than credit institutions.

Under the Directive, electronic money must be redeemable for cash at equal value. Also, issuers of electronic money are required to implement safeguards against money laundering. However early systems did not have extensive uptake (most e-money providers remain below the threshold stipulated in the Directive) and a range of different providers including prepaid card providers, mobile operators and payments services providers have entered this rapidly changing market.

The "eMoney Directive" aimed to:

  • enable new, innovative and secure electronic money services to be designed
  • provide market access to new companies
  • foster real and effective competition between all market participants.

This should benefit consumers, businesses and the wider European economy.

The Directive focused on modernizing EU rules on electronic money, especially bringing the prudential regime for electronic money institutions, into line with the requirements for payment institutions in the Directive on Payment Services.

The challenge in applying this regulation is to establish what kind of activity qualifies a business to be an ELMI. This led to different applications across the European Union. Especially the question arose with respect to mobile operators, and whether their payment services qualify them as ELMIs.

In April 2004, the European Commission launched a consultation to look into how the eMoney Directive should be applied to mobile operators, whether the Directive covers risks appropriately and if it is conducive to the industry's competitiveness. The consultation closed in October 2005 and a report containing recommendations was expected in Spring 2006.

The eMoney Directive provides a common regulatory approach to e-money providers for European countries. However it is an exception, and there is little uniformity in payments across countries. For example, in the United States legislation differs across states, and in other countries, there is not yet a system to regulate online payments. Japan adopted stored-value card legislation, but it is not clear how this would deal with electronic money providers such as, e.g. PayPal. In other countries legislation is currently being considered.


The eMoney Directive solved several ambiguities created by the previous Directive, but did not resolve several other ambiguities, and introduced a few ambiguities of its own. As a result, the legal treatment of electronic money services — particularly platform payment and mobile payment systems — is still not entirely clear, although precisely these types of services seem to be the future of online payments.

Another important issue is that the eMoney Directive has failed to fundamentally change the waiver regime (according to which electronic money service providers can be exempted from specific obligations), which still does not apply on a European level. The improvements brought by the eMoney Directive may therefore not be sufficient to trigger an uptake of electronic money.[1]