Regulation of (prepaid) giftcards. 30 January 2017

Transcriptie

1 Regulation of (prepaid) giftcards 30 January 2017

2 Relevant questions Which parties involved? Which regulatory laws and regulations? Legal qualification of giftcard? Legal qualification of relevant parties? Impact other laws and regulations (e.g. Dutch Civil Code) 1

3 Which parties? or Bank or EMI Issuer Distributors Processor Buyers Cardholders Merchants 2

4 Regulatory landscape (developments) Rules EU Directives: Revised Electronic Money Directive (EMD2), EMD3 will follow Payment Services Directive (PSD2 to be implemented as per 13 January 2018) Anti-Money Laundering Directive III (AMLD IV and V as per 26 June 2017?) Dutch Financial Supervision Act (Wft) Dutch Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft) Dutch Sanctions Act (Sanctiewet) 3

5 Regulatory landscape Regulatory system Dutch companies are without DNB-license not allowed to (i) issue electronic money; or (ii) provide payment services without license Dutch license can be passported into Europe Not always required: Exclusion (out-of-scope of regulation, uitzondering) Exemption (vrijstelling) Exclusion, Wft does not apply, Wwft may apply, but also exclusion for CDD-measures Exemption, no license required, other Wft regulations apply, Wwft also applies, BUT ONLY NATIONAL! 4

6 Regulatory landscape Exemption-regime (vrijstellingsregime) E-money: Float max EUR 5 million Max EUR 150 per card Notification DNB Payment services: Monthly payment volume max EUR 3 million Not for money transfers Notification DNB Safeguarding requirements same as for license (Stichting Derdengelden, rules for coverage, 100%) Application process rather similar to license-application 5

7 Definitions (EMD2, PSD(2), Wft) Electronic Money means 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 as defined in point 5 of Article 4 of Directive 2007/64/EC, and which is accepted by a natural or legal person other than the electronic money issuer; Payment Instrument means any personalised device(s) and/ or set of procedures agreed between the payment service user and the payment service provider and used by the payment service user in order to initiate a payment order; 6

8 Definitions (EMD2, PSD, Wft) Electronic Money means 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 as defined in point 5 of Article 4 of Directive 2007/64/EC, and which is accepted by a natural or legal person other than the electronic money issuer; Question: What if acceptance only by the issuer? No Electronic Money But still payment instrument? 7

9 Limited Network exclusion Wft after EMD2 article 1:5a paragraph 2 (k) het verrichten van betalingstransacties ten behoeve van de aankoop van goederen of diensten die worden uitgevoerd met betaalinstrumenten die voorzien in een welbepaalde behoefte en die uitsluitend kunnen worden gebruikt: i. hetzij in door de uitgevende instelling gebruikte bedrijfsgebouwen; ii. hetzij op grond van een handelsovereenkomst met de uitgevende instelling binnen een beperkt netwerk van dienstverleners; iii. hetzij voor een beperkte reeks goederen dan wel diensten. A network is deemed to be limited where the number of acceptors is limited, for example because the payment instrument can be used only within a limited area, such as a shopping centre. A network that is small initially but is intended to expand in due course is not covered by the exemption. Exemption is therefore conditional upon the limited size of the acceptance network being inherent in the purpose for which the payment instrument can be used. If the number of acceptors exceeds a few dozen, the network is no longer deemed to be of limited size. The possibilities for using a payment instrument may also be limited by virtue of the fact that it can be used only to pay for certain goods or services. This exemption may be applied only in the case of easily identifiable, clearly recognisable and well-defined products or services. Moreover, the payment instrument and payment process should be designed in such a way that the instrument cannot possibly be used to pay for other goods or services. 8

10 UK Premises: staff catering cards - reloadable cards for use in the employer's canteen or restaurant; tour operator cards - issued for use only within the tour operator's holiday village or other premises (for example, to pay for meals, drinks and sports activities); store cards - where the card can only be used at the store's premises (so where a store card is co-branded with a third party debit card or credit card issuer and can be used as a debit card or credit card outside the store, it will still fall within the regulations). 9

11 UK Limited Network/Limited Range: transport cards - where these are used only for purchasing travel tickets (for example, the Oyster card which provides access to different service providers within the London public transport system); petrol cards (including pan-european cards) - where these are issued for use at a specified chain of petrol stations and forecourts at these stations; membership cards - where a card can only be used to pay for goods or services offered by a specific club or organisation; store card - where the card can be used at a specified chain of stores at their premises or on their website 10

12 Limited Network exclusion Wft after EMD2 article 1:5a paragraph 2 (k) het verrichten van betalingstransacties ten behoeve van de aankoop van goederen of diensten die worden uitgevoerd met betaalinstrumenten die voorzien in een welbepaalde behoefte en die uitsluitend kunnen worden gebruikt: i. hetzij in door de uitgevende instelling gebruikte bedrijfsgebouwen; ii. hetzij op grond van een handelsovereenkomst met de uitgevende instelling binnen een beperkt netwerk van dienstverleners; iii. hetzij voor een beperkte reeks goederen dan wel diensten. PSD2 services based on specific payment instruments that can be used only in a limited way, that meet one of the following conditions: i. instruments allowing the holder to acquire goods or services only in the premises of the issuer or within a limited network of service providers under direct commercial agreement with a professional issuer; ii. iii. instruments which can be used only to acquire a very limited range of goods or services; Wft after PSD2 article1:5a paragraph 2 (k) diensten die gebaseerd zijn op specifieke betaalinstrumenten: i. waarmee de houder uitsluitend in de bedrijfsgebouwen van de uitgever of binnen een beperkt netwerk van dienstverleners die een directe handelsovereenkomst met een uitgever hebben, goederen of diensten kan aanschaffen; ii. iii. die uitsluitend gebruikt kunnen worden voor de aanschaf van een zeer beperkt aantal goederen of diensten; of 11

13 Limited Netwerk Exclusion PSD2: (13) Feedback from the market shows that the payment activities covered by the limited network exclusion often comprise significant payment volumes and values and offer to consumers hundreds or thousands of different products and services. That does not fit the purpose of the limited network exclusion as provided for in Directive 2007/64/EC and implies greater risks and no legal protection for payment service users, in particular consumers, and clear disadvantages for regulated market actors. To help limit those risks, it should not be possible to use the same instrument to make payment transactions to acquire goods and services within more than one limited network or to acquire an unlimited range of goods and services. A payment instrument should be considered to be used within such a limited network if it can be used only in the following circumstances: first, for the purchase of goods and services in a specific retailer or specific retail chain, where the entities involved are directly linked by a commercial agreement which for example provides for the use of a single payment brand and that payment brand is used at the points of sale and appears, where feasible, on the payment instrument that can be used there; second, for the purchase of a very limited range of goods or services, such as where the scope of use is effectively limited to a closed number of functionally connected goods or services regardless of the geographical location of the point of sale; or third, where the payment instrument is regulated by a national or regional public authority for specific social or tax purposes to acquire specific goods or services. 12

14 Limited Netwerk Exclusion II PSD2: (14) Payment instruments covered by the limited network exclusion could include: store cards, fuel cards, membership cards, public transport cards, parking ticketing, meal vouchers or vouchers for specific services, which are sometimes subject to a specific tax or labour legal framework designed to promote the use of such instruments to meet the objectives laid down in social legislation. Where such a specific-purpose instrument develops into a general-purpose instrument, the exclusion from the scope of this Directive should no longer apply. Instruments which can be used for purchases in stores of listed merchants should not be excluded from the scope of this Directive as such instruments are typically designed for a network of service providers which is continuously growing. The limited network exclusion should apply in combination with the obligation of potential payment service providers to notify activities falling within its scope. 13

15 The notification requirement (article 37 paragraph 2 PSD2) Member States shall require that service providers carrying out either of the activities referred to in points (i) and (ii) of point (k) of Article 3 or carrying out both activities, for which the total value of payment transactions executed over the preceding 12 months exceeds the amount of EUR 1 million, send a notification to competent authorities containing a description of the services offered, specifying under which exclusion referred to in point (k)(i) and (ii) of Article 3 the activity is considered to be carried out. On the basis of that notification, the competent authority shall take a duly motivated decision on the basis of criteria referred to in point (k) of Article 3 where the activity does not qualify as a limited network, and inform the service provider accordingly 14

16 Draft Dutch PSD2 Implementation Act Ten eerste wordt voorgesteld om de uitzondering voor betaaldiensten die worden verricht binnen een beperkt netwerk strikter te definiëren, met als gevolg dat vooral kleine, beperkte netwerken buiten de reikwijdte van PSD II vallen. And also: Tot slot wordt de uitzondering die van toepassing is op handelsagenten aangepast. De uitzondering geldt wanneer agenten voor rekening van alleen de betaler dan wel alleen de begunstigde handelen, ongeacht of zij in het bezit zijn van de geldmiddelen van de cliënten. Indien agenten voor rekening van zowel de betaler als de begunstigde handelen (zoals op bepaalde platformen voor elektronische handel), worden zij slechts van het toepassingsbereik van de richtlijn uitgesloten indien zij op geen enkel ogenblik in het bezit zijn van of de controle hebben over de geldmiddelen van de cliënten. Door de striktere definiëring van de uitzonderingen, wordt de reikwijdte van PSD II vergroot zodat meer dienstverleners onder de richtlijn vallen. Dit betekent dat zij een vergunning als betaalinstelling nodig hebben indien zij deze betaaldiensten verrichten in de uitoefening van beroep of bedrijf. In de implementatiewerkgroepen in Brussel is aangegeven dat het niet relevant is of dit wel of geen hoofdactiviteit van de onderneming betreft. 15

17 Introducing the Van Doorne Giftcard 16

18 Thin line Difference between a) acceptance by Van Doorne only; b) acceptance by Van Doorne and c) acceptance by several law firms; d) Acceptance by several law firms and other service providers. Exclusion? a) No e-money, no payment instrument b) Yes, limited network exclusion c) Possibly, number of acceptants becomes relevant and/or volume d) No 17

19 AML-legislation Article 7 lid 1 sub C Wwft: No CDD in case: elektronisch geld als bedoeld in artikel 1:1 Wft, waarvan: 1. indien de geldswaarde die is opgeslagen op de elektronische drager of die op afstand is opgeslagen in een centrale rekeningadministratie niet kan worden heropgeladen, het maximumbedrag niet meer dan EUR 250 bedraagt; of 2. indien de geldswaarde die is opgeslagen op de elektronische drager of die op afstand is opgeslagen in een centrale rekeningadministratie kan worden opgeladen, het totaalbedrag van de transacties die in een kalenderjaar kunnen worden verricht niet meer dan EUR bedraagt, tenzij de houder een bedrag van EUR of meer heeft laten terugbetalen in datzelfde kalenderjaar 18

20 AML-legislation (AMLD IV) No CDD WHEN: (a) the payment instrument is not reloadable, or has a maximum monthly payment transactions limit of EUR 250 which can be used only in that Member State; (b) the maximum amount stored electronically does not exceed EUR 250; (c) (d) (e) the payment instrument is used exclusively to purchase goods or services; the payment instrument cannot be funded with anonymous electronic money; the issuer carries out sufficient monitoring of the transactions or business relationship to enable the detection of unusual or suspicious transactions. For the purposes of point (b) of the first subparagraph, a Member State may increase the maximum amount to EUR 500 for payment instruments that can be used only in that Member State. Member States shall ensure that the derogation provided for in paragraph 1 is not applicable in the case of redemption in cash or cash withdrawal of the monetary value of the electronic money where the amount redeemed exceeds EUR

21 AML-legislation (compromise text AMLD V) NO CDD WHEN: (a) the payment instrument is not reloadable, or has a maximum monthly payment transactions limit of EUR 150 which can be used only in that Member State; (b) the maximum amount stored electronically does not exceed EUR 150; BUT: Member States shall ensure that the derogation provided for in paragraph 1 is not applicable in the case of: a) of redemption in cash or cash withdrawal of the monetary value of the electronic money where the amount redeemed exceeds EUR 50 b) remote payment transactions as defined in point (6) of Article 4 of the Directive 2015/2366/EC where the amount paid exceeds EUR 50 and as from the date of entry into force of this directive + 24 months for all remote payment transactions. PSD2: Remote payment transaction = a payment transaction initiated via internet or through a device that can be used for distance communication; 20

22 SUMMARY Purpose of the card? Only acceptance by issuer Closed-loop (limited network) Open loop Limited Network Professional issuer required for exclusion? No exclusion > EUR 1 million? Open loop and possibly closed-loop >EUR 1 million Exemption-regime (vrijstelling), but only national Own EMI-license Cooperation with bank or EMI Safeguarding Principle: 100% coverage Funds not as means of finance CDD for regulated giftcards Always CDD on merchants Exemption-regime for cardholders more narrow under AMLD IV And even more narrow under AMLD V (likely also for remote payment transactions) 21

23 Contact Arno Voerman Regulatory Partner Payments/FinTech lawyer t +31 (0) m +31 (0) voerman@vandoorne.com 22

24 AMSTERDAM Van Doorne N.V. Jachthavenweg KM Amsterdam P.O. Box AG Amsterdam The Netherlands t +31 (0) info@vandoorne.com LONDON Van Doorne UK B.V. 125 Old Broad Street London EC2N 1AR United Kingdom t london@vandoorne.com ASSOCIATION WITH VANEPS KUNNEMAN VANDOORNE ARUBA I BONAIRE I CURACAO I ST. MAARTEN DUTCH CARIBBEAN DESK (AMSTERDAM) info@ekvandoorne.com