Electronic Money Institutions According to the EU Directive and the Cyprus Electronic Money Law ‘’Electronic Money’’ is defined as ‘’electronically including magnetically, stored monetary value as ...
According to the EU Directive and the Cyprus Electronic Money Law ‘’Electronic Money’’ is defined as ‘’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, and which is accepted by a natural or legal person other than the electronic money issuer’’.
Central Bank of Cyprus (CBC)
Law Regarding EMIs:
EMIs are governed by the Electronic Money Law
Documents regarding the application to the Central Bank of Cyprus:
The application contains three questionnaires which are completed by the directors and managers, the applicant and the applicant’s controllers. (EMD/Q1, EMD/Q2, EMD/Q3) Also, the application must contain inter alia the following:
The minimum amount for initial/share capital requirement of electronic money institutions should be at least €350,000, but it is advisable that any applicant provides €500,000 in cash as share capital.
Within six months of the receipt of an application, the CBC will inform the applicant whether the authorization has been granted or refused.
Minimum personnel suggested 4 persons but depends on the Company’s day to day operations.
Minimum functions to be established:
Licensed Electronic Money Institution allows provide wider range of financial services comparing with Payment Institution designed for instant payment processing. Electronic Money Institution licensed in one European Union (EU) member state opens up business opportunities to act and provide services in all other EU/EEA countries, enjoying the benefits of a Common Market without any restrictions and additional requirements.
Difference between Payment and Electronic Money Institution
Electronic Money (E-money) defined by European Central Bank as an electronic store of monetary value on a technical device that may be widely used for making payments to entities other than the e-money issuer.
The device acts as a prepaid bearer instrument, which does not necessarily involve bank accounts in transactions. Directive 2009/110/EC established legal basis for e-money issuing in the European Union (EU).
The practical difference between Electronic Money (E-money) and Payment Institution (PI) is that E-money institutions in addition to the services provided by PI are entitled to issue Electronic Money. It means that Electronic Money Institutions allowed to store clients’ funds for a longer period what Payment Institutions usually not allowed. E-money license allows issue of payment cards, e-wallets and other payment instruments requiring storage of the client funds.
Services provided by Electronic Money Institution
Electronic Money Institution license is the right decision for the payment service providers planning wider range of services than just instant payment processing.
Benefits of Emoney and where Tornaritis Law Firm can assist
Cyprus has already implemented EU Second Payment Services Directive (PSD2) allowing Payment Initiation Service (PIS) – initiation of a payment order from the client bank account at the request of the client from the payment account held at another payment service provider (bank). PSD 2 also allows E-money Institution provide Account Information Service (AIS) accessing consolidated information from the client accounts held by at another payment service providers (banks) and have overall view of client financial information.
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