How does the new EU anti-money laundering regulation affect e-money products for consumers, prepaid and voucher providers and merchants?

Expert article from Dr. Samareh Khosravi, Managing Director Legal & Compliance epay Germany

The European Parliament adopted a new money laundering package on 24.04.2024, which includes a new money laundering regulation. This regulation ensures the maintenance of an exemption for the use of low-risk and low-value e-money products (up to a maximum nominal value of EUR 150). This regulation is very important as it allows consumers to continue using such e-money products without prior customer identification. Originally, the European Commission had proposed that even if the risk of money laundering and terrorist financing was proven to be low, extensive personal data would have to be provided when purchasing and using prepaid products. This would have compromised the protection of privacy.

European coalition of associations advocates practical application

Article 12 of the Anti-Money Laundering Directive previously allowed a broad exemption for non-rechargeable gift and voucher cards under certain risk-reducing conditions. The Prepaid Association of Germany (PVD) and a cross-border coalition of associations campaigned early on to maintain this proven exemption. It plays an important role in fostering innovation in the e-money sector by allowing easy access to these types of prepaid products and supporting the protection of personal data. It also contributes to financial inclusion by providing access to e-money products to a wide range of users, in particular the unbanked and under-banked. An identification requirement for these products would in many cases make their distribution de facto impossible, leading to fears that some of these products would disappear from the market. This would have a negative impact on consumer choice and on the companies that issue, distribute or accept such products.

Financial inclusion and innovative payment solutions secured!

1. Impact on consumers
   Thanks to this agreement to maintain the exemption, consumers can continue to buy low-risk and low-value e-money products without identification requirements and use them anonymously. This means that when purchasing gift cards and vouchers, the customer’s identity does not have to be verified, e.g. by means of an identity card check. This strengthens data protection and enables further future-oriented market development of payment solutions that ensure convenience and added value for consumers.
2. Impact on retailers and brands
   For retailers and brands, the maintenance of the exemption means that they can continue to offer their customers their usual range of products. Brands offering e-money vouchers and top-up products will continue to be able to sell vouchers up to the limit of €150 without additional identification. This regulation improves and simplifies the marketing of vouchers both online and in brick-and-mortar stores.
3. Impact on payment service providers like epay
   For epay, which has been a prepaid pioneer in Europe from the very beginning and is now the market leader in branded payments such as vouchers and top-up products, the EU decision means that we can continue to develop our innovative products and solutions for our numerous brand partners, create new innovations and distribute them through our large network of retail and e-commerce partners, enabling consumers to use digital services securely and easily while protecting their privacy.

As a founding member of the PVD, epay has always supported the interests of the industry and consumers, and with its rich portfolio, epay stands for secure and easy participation in digital services and thus financial inclusion worldwide.

Learn more about our voucher innovations here: epayworldwide.com

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