Electronic Money

Electronic money (e-money) is broadly defined as an electronic store of monetary value on a technical device that may be widely used for making payments to entities other than the e-money issuer. The device acts as a prepaid bearer instrument which does not necessarily involve bank accounts in transactions.

E-money products can be hardware-based or software-based, depending on the technology used to store the monetary value.

Hardware-based products

In the case of hardware-based products, the purchasing power resides in a personal physical device, such as a chip card, with hardware-based security features. Monetary values are typically transferred by means of device readers that do not need real-time network connectivity to a remote server.

Software-based products

Software-based products employ specialised software that functions on common personal devices such as personal computers or tablets. To enable the transfer of monetary values, the personal device typically needs to establish an online connection with a remote server that controls the use of the purchasing power. Schemes mixing both hardware and software-based features also exist.

ECB statistics on electronic money do not distinguish between hardware-based and software-based e-money.

Directive 2009/110/EC of the European Parliament and Council of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutions established a new legal basis for e-money issuance in the European Union.

Article 2(1) of the Directive defines an “electronic money institution” as a legal person that has been granted authorisation to issue e-money. Furthermore, according to Article 2(2) of the Directive, “electronic money” means “electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions […], and which is accepted by a natural or legal person other than the electronic money issuer”. Credit institutions, as well as other financial and non-financial institutions, may issue e-money.

In order to align the ECB’s monetary financial institution (MFI) balance sheet statistics with the new definitions, Regulation ECB/2008/32 was amended by Regulation ECB/2011/12 and Guideline ECB/2007/9 by Guideline ECB/2011/13. Data complying with the revised reporting scheme are available as of the reporting period December 2011.

Data on e-money issued by euro area MFIs start in September 1997, while national data may start later depending on their date of availability. As a consequence, as statistical developments are affected by changes in the reporting population, statistical developments of euro area aggregates are affected by changes in the number of euro area countries for which e-money statistics are available.

Aggregated total issuance by euro area MFIs is available on a monthly basis, while national issuance by all electronic money institutions is available only annually.

The amount outstanding of e-money issued by euro area MFIs is included in the item “overnight deposits” on the MFI balance sheet.