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Electronic money institution

Licensing procedures and review times, procedure for extending licensing to payment services, licence exemption procedure

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If you wish to issue, manage and provide electronic money within the meaning of Article L. 315-1 of the Monetary and Financial Code in the normal course of your business, you must submit an application for an electronic money institution licence to the Autorité de contrôle prudentiel et de résolution (ACPR).

In addition to issuing, managing and providing electronic money, electronic money institutions may provide payment services (see the section on payment institutions) and services related to electronic money or payment services as defined by the applicable regulations.

Before licensing an electronic money institution, the ACPR checks the following:

  • suitability of the legal form for the proposed activity,
  • sufficient initial capital and level of prudential capital with respect to capital requirements,
  • programme of operations and technical and financial resources,
  • description of the distribution network,
  • identity and status of direct and indirect capital contributors, and where applicable, of their guarantors,
  • central administration located in the same national territory as the registered office,
  • sound governance arrangements including a clear organisational structure with a well-defined, transparent and consistent division of responsibilities,
  • persons effectively running the undertaking or the persons placed in charge of the electronic money activity in the case of hybrid institutions (institutions pursuing other commercial activities) must meet propriety, knowledge, experience and fitness requirements
  • effective risk detection, management and control procedures and an appropriate internal control system, including sound administrative and accounting procedures and appropriate arrangements to prevent money laundering and terrorist financing,
  • protection of user funds,
  • resources implemented to ensure the security of means of payment and general organisation to ensure security, oversight of orderly operation and fraud prevention.

If it is expected that the volume of electronic money in circulation will not exceed a monthly average of EUR 5 million, it is possible to apply to the ACPR to be licensed as a simplified electronic money institution (Art. L. 526-19 of the Monetary and Financial Code).

In this case, the prudential requirements are adjusted, notably in terms of initial capital, capital requirements and internal control (restricted to control of key service providers). The units of electronic money incorporated in the electronic money instruments issued by the institution may not exceed EUR 250 and the institution is not eligible for the European passport procedure.

Licensing procedures and review times

Before starting activities, you must:

  • contact the Secretariat of the Authorisation Directorate (2785-SECRETARIAT-DIRECTION-UT@acpr.banque-france.fr) to organise a meeting to present your plans and proposed timetable;

  • prepare an application for the desired licence, including all supporting documentation:

 

- electronic money institution

- simplified electronic money institution

 

After receiving your application, the Authorisation Directorate will review your request. The ACPR will issue the electronic money institution licence within three months of receipt of a complete application.

 

As part of the review of the application and in accordance with the regulations, the licence is issued after obtaining the opinion of Banque de France on the security of the means of payment. If the application is incomplete, additional information may be requested and the review period extended.

Procedure for extending licensing to payment services

If an electronic money institution wishes to provide, without previously declaring them, the payment services mentioned in 1° of Article L. 526-2 of the Monetary and Financial Code or the related service of granting credit mentioned in 2° of the same article, it must send the completed annex to Instruction 2014-I-05.

 

This must be done three months before the start date for provision of the services in question.

Licence exemption procedure

The College of the ACPR may, under very specific circumstances, grant a licence exemption (art. L. 521-3 of the Monetary and Financial Code): an undertaking may issue and manage electronic money with a view to the acquisition of goods or services solely on the premises of the undertaking or, under a commercial agreement with it, within a limited acceptance network or for a limited range of goods or services, provided that the maximum amount that may be loaded on the electronic device does not exceed EUR 250.

 

To grant this exemption, the ACPR considers in particular the following points:

  • security conditions for the means of payment;
  • consumer protection arrangements.

 

To apply for a licence exemption, you must:

 

After receiving your application, the Authorisation Directorate will review your request.The ACPR will issue the electronic money institution licence exemption within three months of receipt of a complete application.

 

If the application is incomplete, additional information may be requested and the review period extended. As part of the review of the application and in accordance with the regulations, the exemption is issued after obtaining the opinion of Banque de France on the security of the means of payment.

 

Once the exemption is obtained, the undertaking must provide the ACPR with an annual report evidencing compliance with the abovementioned provisions and the security of the means of payment that it issues and manages. The ACPR will send a copy of this annual report to the Banque de France.

 

Updated on: 10/21/2021 16:23