Payment Services and E-money Business
E-Geld-Geschäft : Deutsche VersionIssuance of E-Money : English version
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The Issuance of E-Money

The e-money business is understood as the issuing of e-money (see section 1a subsection 2 ZAG).

The Term „E-Money“

According to the ZAG, e-money is any electronically, including magnetically, stored monetary value in the form of a claim against the issuer which is issued on receipt of funds for the purpose of executing payment transactions within the meaning of section 675f subsection 3 first sentence of the German Civil Code (BGB) and which is accepted by other natural or legal persons than the issuer (see section 1a Subsection 3 ZAG). 

One option as data medium for the storage of monetary value is a card owned by the e-money’s owner (e.g. the GeldKarte). The other option is the storage on an external server (as is the case, for instance, with the product “paysafecard” or prepaid credit cards).

According to the e-money definition mentioned above, the monetary value has to be issued against payment of an amount of money (e.g. by giving a sum of money in cash or by bank transfer). The question to what extent reward schemes, which give customers „points“ for their purchase, fulfil these requirements would require a thorough legal examination on the basis of the details of an individual case.

Another requirement is that the monetary value represented by the respective e-money is accepted for payment not only by the e-money issuer himself. The e-money product rather has to be accepted by a multitude of different persons and companies for payment of the goods and services offered. Coupon cards issued by a specific retail store allowing for payment in that retail store, only, therefore are no e-money.

Commonly used e-money products are the GeldKarte, the product “paysafecard” as well as prepaid credit cards.

The Issuance of E-Money

The issuer of e-money is the company which records the monetary value in its books and assumes the liability vis-à-vis the purchaser of the monetary value and the merchants to accept the monetary value represented by the e-money as payment (“...value in the form of a claim against the issuer, ...”). If, for example, an e-money product is sold in a gas station, the operator of the gas station is not issuing e-money. However, by selling the e-money product, the operator of the gas station is part of the distribution chain and is therefore acting as an e-money agent (distributor) for the e-money institution according to section 1a subsection 6 ZAG.