Payment Services and E-money Business
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The Exceptions to the E-Money Business

The ZAG contains two exceptions. In the cases of the exceptions e-money business is not being conducted.

A monetary value is not deemed to be e-money if it is stored on instruments which can be used to acquire goods or services only in the issuer’s premises or under a commercial agreement with the issuer either for the acquisition within a limited network of service providers or for the acquisition of a limited range of goods or services (see section 1a subsection 5 No. 1 ZAG). Such instruments are for instance loyalty cards of a chain store, petrol cards (e.g. “Essocard”), voucher cards employable within a certain department store (shop-in-shop) or payment cards for a particular cafeteria, holiday resort, sports stadium or university campus. Cards issued for public transport which enable one to pay for one’s fare, are covered by the exception, too. The exception may be applicable if monetary value stored in the framework of bonus schemes or rebate schemes match the definition of e-money under section 1a subsection 3 ZAG. Whether the exception is in fact applicable depends on the details of the card scheme’s implementation, which renders it crucial to legally examine the individual merits of a case.

Moreover, a monetary value is not considered to be e-money if it is to be used for payment transactions executed via a technical device (e.g. a smartphone), if the goods or services purchased are to be delivered to or used with a technical device (see section 1a subsection 5 No. 2 ZAG). This exception benefits for example mobile phone network operators offering various digital products (e.g. software or ring tones) if payment is effected by debiting the buyer’s prepaid account.