The UK government has published a consultation document and is requesting feedback from interested parties on planned changes to the way that electronic money is regulated in the UK.
The document sets out how the UK plans to meet the requirements of the Electronic Money Directive, adopted by the EU in September 2009, and how the government will “promote innovation and competition in the e-money market.”
In particular, ‘Laying Of Regulations To Implement The New E-Money Directive’ explains that the regulatory changes are “designed to promote the entry of mobile phone operators into the e-money market; and to promote the development of new forms of as yet untested e-money services.”
“The market for e-money is growing rapidly,” the consultation document explains. “The number of e-money accounts operated by e-money issuers in Europe has grown from 15 million in 2005 to 125 million at the end of 2009, and the total value of outstanding e-money has risen from €400 million to €1.7 billion over the same period.” But, it continues, “a substantial volume of business is undertaken by issuers who fall outside the scope of regulation.”
“The Government believes that the e-money market has significant growth potential,” the document adds. “It has designed the new prudential and conduct rules, set out in this consultation, to promote the growth of the market, while protecting consumers. It would like to encourage more innovation and new entrants to the market, both on-line and in the card market.”
“The scope of activities that e-money institutions can undertake will be expanded so that they can undertake mixed business activities,” it continues. “This means they will be able to carry out unrelated payment services and other unregulated business. They will no longer be restricted to issuing and administering e-money, or storing data. This removes a long standing barrier to entry to the market which has, for example, inhibited mobile phone operators from developing new services or entering the market.”
Readers can download the consultation document from HM Treasury’s website. Feedback is being requested from both participants in the electronic money industry and consumers. The deadline for replies is 30 November.