We issue a prepaid card that is used only for transport. Does this fall within the scope of electronic money issuance?
A prepaid card used only for transport is considered to be used “only to purchase a limited range of services” and to be outside the scope of the Law under the fifth paragraph of Article 18 of the Law. However, the assessment of each business model against the fifth paragraph of Article 18 of the Law must be made separately, taking into account the principles of how that business model operates.
Interpreting the limited-use exemption correctly
The logic behind the exemption is that the card can be used only in a very narrow network or for a specific range of goods/services. If the card is also valid at other businesses or its area of use has expanded, the claim that it is out of scope weakens.
For this reason, when the business model changes, for example when the card is opened from transport to grocery shopping, the legal position must be reassessed. Institutions should also clearly define the areas of use in their contracts and take care not to drift into an activity that requires a license.
In uncertain cases, getting an opinion from the competent authority is the safest way.
