Question ID
2023_6736
Legal act
Directive 2009/110/EC (EMD)
Topic
Not applicable
Article
2 and 3
Paragraph
2 and 4
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
n.a.
Name of institution / submitter
francesca provini
Country of incorporation / residence
italy
Type of submitter
Competent authority
Subject matter
Identify when EMD2 needs to be applied to vouchers/gift cards issued by an electronic money institution.
Question

Do vouchers/gift cards issued by an electronic money institution (EMI) to top-up an e-money account (managed by the EMI itself) in order to purchase on an e-commerce platform: i) goods and services sold directly by companies belonging to the same corporate group of the EMI (thus falling out of the scope of PSD2, encompassing the exemption provided for intra-group transactions in Article 3(1)(n) of the PSD2); ii) goods and services of third-party merchants, have to be qualified as e-money at the time of issuing (i.e. sale) or - given the possible indefinite use of the funds - they acquire that status only at the moment they are used to purchase goods and services from third-party merchants on the e-commerce platform?

Background on the question

An EMI, established in a EU Member State, issues vouchers/gift cards (hereafter GCs) to top-up an e-money account that can be used to purchase goods and services on an e-commerce platform operated by a company belonging to the same corporate group. According to the intermediary, at the time of sale (both on-line or in physical stores located in the host member state) the GCs would not qualify as e-money (therefore with no application of the safeguarding and prudential requirements) until the moment they are loaded into the e-money account, opened by the EMI for the platform’s customer. The use of said account for the purchase of goods/services sold (through the platform) by affiliated merchants (outside the EMI’s group) would be qualified as provision of payment services.

 

The home competent authority has informally communicated that it generally shares the EMI's view, considering that the funds could be used in two ways:

 

- by applying the exemption provided for intra-group transactions in Article 3(1)(n) of the PSD2 for purchasing goods and services sold by companies belonging to the same corporate group of the EMI (the funds would in fact pass from the availability of the EMI to that of a company, both  belonging to the same corporate group);

- for payment transactions from the EMI to a merchant (outside the group), in case of purchase of goods or services sold by the merchant itself.

 

It should be clarified whether the GCs should be considered as an e-money instrument from the moment of their sale or if the indefinite future use of the funds (for payment transactions that could either be in or out of the scope of PSD2) may lead to the GCs being considered outside the scope of EMD2 until they are loaded on an e-money account and used for payment services within the scope of PSD2.

Submission date
Final publishing date
Final answer

Article 6(3) of Directive 2009/110/EC (EMD2) requires that e-money is issued without delay upon the receipt of funds by the issuer. Articles 5 and 7 set out the requirements in terms of own funds and safeguarding of received funds that the issuer must meet in connection with the activity of issuing e-money.

In EBA's Q&A No. 5566/2020, it was considered that, in the case of pre-paid vouchers which are distributed upon receipt of cash from clients, and which can only be used to top-up e-money accounts opened with the issuer, the monetary value represented by the voucher distributed to the customer upon the receipt of cash should be qualified as electronic money in accordance with Article 2(2) of EMD2.

In the case described by the submitter, gift cards are purchased for the purpose of loading an account holding e-money in the name of a customer of the EMI. While the monetary value represented by the gift card may only be used to purchase goods/services after the customer has used the gift card to load his/her account, it appears from the background information that the funds are received by the issuer at the moment of the purchase of the gift card. If that is the case, it is at that moment that, in line with Article 6(3) and as clarified by EBA Q&A 5566/2020, the issuer must issue e-money in the corresponding amount, as well as respecting the own funds and safeguarding requirements applicable according to Articles 5 and 7.

The fact that the merchants that accept the gift cards in question are part of the same group as the issuer does not make the transactions intra-group transactions, since a third party is involved, a consumer, who uses the e-money to purchase goods from the merchants.

It should be borne in mind that different gift cards and vouchers can have differing arrangements and may not involve e-money at all, depending on the details.

Disclaimer:

The answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.

Status
Final Q&A
Answer prepared by
Answer prepared by the European Commission because it is a matter of interpretation of Union law.

Disclaimer

The Q&A refers to the provisions in force on the day of their publication. The EBA does not systematically review published Q&As following the amendment of legislative acts. Users of the Q&A tool should therefore check the date of publication of the Q&A and whether the provisions referred to in the answer remain the same.