Introduction to Electronic Money Institutions 

Progress in technology has contributed to the development of a new kind of payment instrument – electronic money.

This may be in the form of value stored on a technical device such as a chip card or indeed, a computer memory. Electronic money (E-Money) can be best described as a digital form of cash since it has many of the characteristics of cash.

Customers buy the electronic equivalent of coins and notes. The customer, in effect, has exchanged cash for another means of payment. Instead of using a debit card (which requires a bank account) or a credit card (which requires a contract agreement) the customer has purchased a non-cash means of payment, which can be used in much the same way as cash or other forms of card payment but without the requirement of third party authorisation.

E-money can therefore be defined as monetary value as represented by a claim on the issuer, which is:

  • electronically stored
  • issued on receipt of funds for the purposes of making payment transactions
  • accepted as means of payment by a natural or legal person other than the issuer

An Electronic Money Institution (E-Money Institution) is an undertaking that has been authorised to issue E money in accordance with the Regulations referred to below.

Directive 2009/110/EC of the European Parliament and of the Council on the taking up, pursuit and prudential supervision of the business of electronic money institutions [the 'Directive'] was signed on 16 September 2009. Member States had to adopt and publish, not later than 30 April 2011, the laws, regulations and administrative provisions necessary to comply with the Directive. The Directive was transposed into Irish law through the European Communities (Electronic Money) Regulations 2011.