More on the e-money directive


Industry experts continue to take widely-differing views on the likely outcome of the European Commission’s review of the e-money directive.

Lars Frosslund, senior manager for payments at TietoEnator Financial Services (and a previous contributor to MPW 19) says that from his client contacts, many mobile network operators “see the E-money directive as a significant hurdle for their market development, even though they don’t say so straight out.”

The directive, he suggests, is having the effect desired by the banks: “Operators stay away from macro payments and credit card processing due to the regulations imposed by the e-money licence requirements. The way we’ve seen the e-money directive so far is that it is a general retaliation from the banks to the operators for their ambitions to step into the payment infrastructure.”

Because operators have to set aside capital for their pre-paid phone card business, “that measure alone would force operators to stay out of the payment business entirely – we see it as a way for banks to protect their business,” he says.

“Some of the operators we have spoken to have taken the stance that they will only work on the micro-payment segments of the market (sub-€20) and that they invite the banks to solve the rest, including stored value accounts.”

Frosslund concludes: “The way I see it, a review of the e-money directive is a necessity if the mobile payment market is to take off in a positive way.

“The demands on the operators will have be nuanced and refined in order not to create cumbersome legal structures for players wishing to enter the market on their own or who would like to take a more competing stance than the banks would like. That sort of competition is something that I definitely would welcome.”

But a consultant who spoke on condition of anonymity told MPW: “The (network operators) have been unregulated for two years now and they are gaining an unfair advantage. If you take the example of Paypal, when they wish to enter a new country they have to enter into a series of separate agreements with each individual country in terms of licences, fraud etc.

“The argument of the telcos, that they are finding the different standards in each country difficult to incorporate into their strategy, is just to buy more time.”


Lars Fr