On 16 January 2019, the Court of Justice of the EU (ECJ) handed down a preliminary ruling regarding the interpretation of Articles 5(2) and 6(1)(a) of the second Electronic Money Directive (EMD II) in Paysera LT (Case C-389/17).
By way of background, Article 5(2) of EMD II sets out the possible methods of calculating the own funds requirements for electronic money institutions – for activities referred to in Article 6(1)(a) of EMD II that are not linked to the issuance of electronic money. The appropriate method is determined by Member State national competent authorities.
In Paysera LT, the question to the ECJ was whether the following activities could be classified as payment services linked to the issuance of e-money under Article 5(2) and 6(1)(a) of EMD II:
- payments (transfers) made by an e-money holder from an e-money account with an e-money institution to third-party accounts with credit institutions; and
- the collection of payments for goods and (or) services supplied by the clients (traders) of an e-money institution holding e-money accounts from persons (buyers) not participating in the e-money system acquiring (paying for) such goods or services.
The ECJ ruled that Article 5(2) of EMD II must be interpreted as meaning that services provided by e-money institutions in payment transactions, constitute activities linked to the issuance of e-money, within the meaning of that provision, if those services trigger the issuance or redemption of e-money in a single payment transaction. The case has now been referred back to the Lithuanian courts.