E-money

A licence may be required where a company issues e-money in the Netherlands on a commercial basis. Any party issuing e-money in the Netherlands must either hold the appropriate authorisation, be excepted from the authorisation requirements or qualify for an exemption. EMIs may start operations only after having been granted authorisation or, where relevant, after having been entered in the register as an exempt EMI.

The starting point is therefore whether the product or service qualifies as e-money. That assessment depends on the legal and operational characteristics of the product. Relevant questions include whether there is monetary value, whether that value is stored electronically or magnetically, whether it represents a claim on the issuer, whether it is issued on receipt of funds, and whether it can be used to make payments to persons other than the issuer.

In practice, many structures sit close to the boundary between payment services, e-money and unregulated stored-value arrangements. A wallet may be used only to facilitate payment transactions, but may also involve the issuance of e-money. A prepaid balance may be redeemable or non-redeemable, usable only with the issuer or also with third-party merchants, and linked to payment instruments, accounts or crypto-assets. The legal qualification should therefore be based on the actual operational flow, not on product labels alone.

Not every stored-value structure requires a full EMI licence. EMD2, PSD2 and the Wft contain exceptions and exemptions that may be relevant depending on the business model.

One important category is the exempt EMI. DNB explains that small EMIs may apply for exemption and may operate in the Netherlands without full authorisation once they have submitted evidence that they meet the applicable conditions and DNB has entered them in its public register. This exemption is subject to conditions, including that the enterprise only issues electronic money by means of a payment instrument or an e-money account on which at most EUR 150 can be stored at any one time, that total outstanding electronic money liabilities do not exceed EUR 5 million, that relevant policymakers have no specified negative antecedents, that safeguarding is properly arranged, and that the enterprise does not issue e-money through agents.

The exemption is not equivalent to a full licence. Exempt EMIs cannot use the European passport and may not expand their activities outside the Netherlands. DNB also notes that exempt EMIs remain subject to obligations, including obligations under the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act (Wet ter voorkoming van witwassen en financieren van terrorisme, Wwft).

Other exclusions may also be relevant, depending on the structure. For example, certain limited network arrangements, instruments accepted only within a restricted network, and purely technical services may fall outside the scope of the full licensing requirement. These exclusions should be interpreted carefully. In particular, a product is not outside scope merely because it is marketed as a voucher, internal balance, loyalty product or wallet credit. The relevant question is whether the legal and operational characteristics fall within the definition of e-money or within an applicable exclusion.

Whether an EMI licence can be obtained is not determined by the legal qualification alone. A licence application requires a sufficiently developed business model, a clear programme of operations, adequate safeguarding of electronic money holders’ funds, a credible governance structure, robust internal controls, sufficient capital and a workable compliance framework.

For e-money models, safeguarding is usually one of the central structuring points. The business must be able to explain when funds are received, when e-money is issued, where funds are held, how they are separated from the institution’s own funds, how redemption is processed and how the structure protects e-money holders in an insolvency scenario.

Another key consideration is the relationship between e-money issuance and payment services. E-money issuance is often combined with payment services, such as the execution of payment transactions, issuing of payment instruments, acquiring, or the operation of payment accounts. The licence scope should therefore be assessed carefully. A model may require authorisation as an electronic money institution and may also involve regulated payment services.

The redemption mechanics are also important. Electronic money is not simply a commercial credit or closed accounting balance. Holders will generally expect to be able to redeem the monetary value under the applicable conditions. The contractual documentation, customer terms, operational processes and safeguarding arrangements should all be aligned with that legal character.

E-money issuance may also interact with MiCA. This is particularly relevant for stablecoins. MiCA defines an electronic money token (EMT) as a type of crypto-asset that purports to maintain a stable value by referencing the value of one official currency.

The issuance of EMTs creates an important connection between MiCA and the e-money framework. An EMT may be a crypto-asset under MiCA, but it is also closely linked to the concept of e-money. For that reason, stablecoin projects referencing a single official currency should not be analysed under MiCA alone. The analysis should also consider EMD2, PSD2, the Wft, safeguarding, redemption, reserve management, white paper obligations and the potential need for an EMI licence.

MiCA may also be relevant where an EMI provides crypto-asset services. Certain authorised financial entities, including EMIs, may be able to use the Article 60 MiCA notification route for specified crypto-asset services, but that route does not remove the need to analyse the interaction with e-money and payment services regulation. In hybrid models, the regulatory perimeter should be assessed across frameworks rather than in isolation.

The EU payments framework is also in transition. The European Commission published proposals for the Payment Services Regulation and Payment Services Directive 3 package in June 2023, and a provisional political agreement was reached on 27 November 2025. The package is intended to cover both payment and e-money services.

An EMI must have a clear governance structure. This includes a transparent allocation of responsibilities, clear reporting lines, effective management oversight and decision-making arrangements that allow the institution to operate in a sound and controlled manner.

The day-to-day policymakers and other relevant function holders must be suitable and reliable. In practice, the supervisory authority will also assess the applicant’s substance, the role of group entities, the independence and effectiveness of internal control functions and the extent to which the applicant can manage and supervise outsourced activities.

Governance is especially important where the model is cross-border, group-based, heavily outsourced or dependent on third-party technology, banking or payment partners. The EMI must remain responsible for its regulated activities and must be able to demonstrate that it has sufficient internal knowledge, oversight and decision-making capacity.

A licence application requires a coherent set of policies and procedures. These documents should explain how the business will issue e-money and provide any related payment services in a controlled and compliant manner.

Depending on the model, the policy framework will typically cover governance, risk management, compliance, AML/CFT, sanctions, safeguarding, redemption, outsourcing, complaints handling, incident management, business continuity, ICT and security risk, data protection, operational resilience, financial administration and internal reporting.

The documentation should be aligned with the actual product. For example, a prepaid card programme, a server-based wallet, a gift card scheme and an EMT-related model may each require a different legal and operational analysis. Policies that do not reflect the actual flow of funds, issuance mechanics and redemption process are unlikely to provide a strong basis for a licence application.

DORA is now also relevant for electronic money institutions. DORA applies from 17 January 2025 and introduces requirements on ICT risk management, incident reporting, digital operational resilience testing and ICT third-party risk management.

An EMI must have an organisation that is capable of supporting the regulated activities for which authorisation is sought. This includes sufficient staff, expertise, systems, controls and operational capacity.

The organisation should be built around the specific e-money model. A business issuing closed-loop value, a multi-merchant wallet, a prepaid payment instrument or an EMT-linked product may each have different operational risks. The applicant should be able to explain how issuance, redemption, transaction processing, customer onboarding, safeguarding, reconciliation, complaints handling, reporting and incident management will work in practice.

Outsourcing is often central to e-money models. Institutions may rely on technology providers, issuing processors, card schemes, cloud service providers, customer support providers, banking partners or group entities. Outsourcing is permitted, but responsibility remains with the licensed institution. The institution must retain sufficient expertise and oversight internally and ensure that outsourcing arrangements do not impair the supervisory authority’s ability to supervise the business.

An EMI must have an effective compliance and internal control framework. This framework should allow the institution to identify, assess, monitor and remediate legal, regulatory, operational and integrity risks on an ongoing basis.

AML/CFT and sanctions are core topics. Depending on the model, the institution may need customer due diligence procedures, transaction monitoring, sanctions screening, suspicious transaction reporting, risk assessments, escalation procedures and controls around higher-risk customers, merchants, jurisdictions or transaction patterns. DNB notes that exempt EMIs also fall within the scope of the Wwft and must perform customer due diligence and notify unusual transactions.

Internal control should also cover safeguarding and reconciliation. The institution should be able to demonstrate that electronic money issued, funds received, funds safeguarded, redemptions and outstanding liabilities are monitored and reconciled in a controlled way. Where the model involves multiple currencies, merchants, programme managers or group entities, the controls should be designed to address those complexities.

An EMI must meet applicable initial capital and own funds requirements. The prudential framework should be assessed by reference to the activities carried out, including both the issuance of e-money and any payment services that are provided alongside it.

The prudential analysis should not be reduced to a formal capital number. DNB will also expect the applicant to have a credible financial forecast, realistic assumptions, adequate funding and sufficient resources to sustain the organisation during and after the licensing process. The applicant should be able to explain how it will remain financially sound as transaction volumes, outstanding e-money liabilities and operational costs develop.

Safeguarding is a separate and essential prudential topic. Payment service providers and EMIs must ensure that third-party funds remain separated from their own funds, and institutions can choose between three safeguarding methods: a customer accounts foundation, a segregated assets account, or an insurance policy or guarantee.

An EMI licence application is a structured process. The applicant must first determine the exact scope of the activities for which authorisation is required and prepare an application file that explains the business model, issuance mechanics, programme of operations, governance, financial position, safeguarding arrangements, internal controls and compliance framework.

The application process consists of two phases: a completeness review and a substantive assessment. The supervisory authority only proceeds to the substantive assessment once the application is complete. If the application remains incomplete after the supervisory authority has requested missing documents, the substantive assessment may not start and the application may be dismissed.

Completeness is therefore a practical priority. Supervisory guidance specifically identifies safeguarding documentation and proof that the statutory minimum capital has been deposited as documents that are often missing. For safeguarding methods involving a customer accounts foundation or segregated assets account, the supervisory authority expects either proof of an opened bank account or a bank-signed commitment letter confirming that the customer acceptance procedure has been completed and that the account has been opened and blocked or frozen until the licence is granted.

The statutory consideration period is three months, but this period does not start until the application is complete. In practice, the overall duration of the process therefore depends heavily on the quality, completeness and consistency of the application file.

At Watsonlaw, we approach e-money matters in a practical, pragmatic and hands-on manner. We understand that businesses issuing stored value, wallets or prepaid products need legal advice that is not only technically sound, but also workable in light of their product design, payment flows, commercial model and growth strategy.

Our work often starts with the legal qualification of the product and the underlying flow of funds. We help clients assess whether their model involves the issuance of electronic money, whether a licence or exemption may be required, and how the model relates to PSD2, MiCA, DORA, AMLD and other relevant frameworks.

From there, we assist with structuring and implementation. This includes designing safeguarding arrangements, reviewing redemption mechanics, preparing customer terms and merchant documentation, drafting internal policies, assessing outsourcing arrangements, preparing the licence application file and supporting engagement with DNB.

Our advice is tailored to the business model at hand. Whether you are launching a wallet, prepaid product, gift card scheme, platform balance, embedded finance structure or stablecoin-related model, we help identify the applicable legal framework and the practical next steps.

No. A wallet balance may qualify as e-money, but that is not always the case. The assessment depends on whether the balance represents monetary value, whether it is stored electronically or magnetically, whether it represents a claim on the issuer, whether it is issued on receipt of funds and whether it can be used to make payments to parties other than the issuer.

Not necessarily. Some gift cards, vouchers and stored-value products may qualify as e-money, while others may fall outside scope or within an exclusion or exemption. Relevant factors include where the value can be used, whether it can be redeemed, whether third-party merchants accept it and whether the structure falls within a limited network.

No. MiCA does not remove the need to analyse the e-money framework. A crypto-asset that references the value of one official currency may qualify as an EMT under MiCA, but the issuance of such a token can also raise questions under EMD2, PSD2 and the Wft. Stablecoin models should therefore be assessed across both MiCA and the e-money framework.

Yes. E-money issuance is often combined with payment services, such as the execution of payment transactions, issuing of payment instruments or acquiring. The license scope and operational setup should reflect both the e-money activity and any payment services provided alongside it.

Safeguarding can be structured through a customer funds foundation, a segregated assets account, or an insurance policy or guarantee. The appropriate method depends on the business model, the flow of funds, the role of third-party banks or payment service providers and the way in which the e-money is issued and redeemed.