We issue a prepaid card that can only be used for purchases made inside Holiday Village X. With this card, meals at the holiday village's restaurant can be paid for, and holiday necessities such as shampoo and slippers can be bought at its shop. Does issuing this prepaid card fall within the scope of issuing electronic money?
A prepaid card used only at goods or service providers inside Holiday Village X is considered to be used “only within a limited network” and to be outside the scope of the Law, provided that the card's terms and conditions clearly state that the card can only be used within this service network and that use of the card outside this network is technically blocked. However, the assessment of each business model against the fifth paragraph of Article 18 of the Law must be made separately, taking into account how that particular business model works.
The closed network criterion
The main question in the assessment is whether the card is used only in a limited network. An area managed by a single business, such as a holiday village, can be considered a closed network.
If the card is also accepted at a merchant outside the holiday village or can be converted into cash, the situation changes. That is why the card's terms of use must be written carefully.
If in doubt, consulting the competent authority helps avoid a wrongly assumed licensing obligation.
