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The business and prudential supervision of electronic money institutions

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The business and prudential supervision of electronic money institutions

This Directive defines the rules on the business and supervision of electronic money institutions in order to contribute to the emergence of a true single market for electronic money services.


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 (Text with EEA relevance).


This Directive defines the rules on the business and supervision of electronic money institutions in order to guarantee fair competition conditions for all payment services providers.

Which institutions are covered by the directive?

  • credit institutions;
  • electronic money institutions *;
  • post office giro institutions entitled to issue electronic money;
  • the European Central Bank and national central banks;
  • Member States or their regional or local authorities when acting in their capacity as public authorities.

Which activities are carried out by electronic money institutions?

Electronic money institutions issue electronic money. They can carry out this activity through natural or legal persons acting on their behalf. In this case, they must obtain authorisation from Member States.

These institutions are also authorised to carry out the following activities:

  • the provision of payment services (see the list appended to the Directive on payment services in the internal market);
  • the granting of credit related to payment services;
  • the provision of operational services and closely related ancillary services in respect of the issuing of electronic money or the provision of payment services;
  • the operation of payment systems;
  • business activities other than the issuance of electronic money.

Own funds and capital requirements

Electronic money institutions must hold initial capital of not less than EUR 350 000.

They are to hold own funds which, as stated in the Directive on the taking up and pursuit of the business of credit institutions, shall be composed mainly of capital, reserves, funds for general banking risks, revaluation reserves and value adjustments. They shall mainly be calculated according to the following methods:

  • for activities not related to the issuance of electronic money, own funds shall be calculated in accordance with methods A, B or C of Article 8 of the Directive on payment services in the internal market);
  • for the activity of issuing electronic money, own funds shall amount to at least 2% of the average outstanding electronic money.

Electronic money institutions must safeguard funds that have been received in exchange for the electronic money issued. These safeguards must be effective no later than five business days after the issuance of electronic money.

What are the conditions for the issuance and redeemability of electronic money?

Electronic money issuers shall issue electronic money at par value on the receipt of funds. Upon request by the electronic money holder, issuers must be able to redeem the monetary value of the electronic money held at any moment.

Redemption conditions shall be clearly established in the contract between the issuer and the holder of electronic money. Redemption may be subject to a fee only if stated in the contract in the following cases:

  • redemption is requested before the termination of the contract;
  • the electronic money holder terminates the contract before the termination date;
  • redemption is requested more than one year after the date of termination of the contract.

This Directive repeals Directive 2000/46/EC.

Key terms of the Act

  • Electronic money institution: a legal person that has been granted authorisation to issue electronic money;
  • Electronic money: electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions.



Entry into force

Deadline for transposition in the Member States

Official Journal

Directive 2009/110/EC



OJ L 267 of 10.10.2009

Last updated: 02.06.2010