Page 59 - Pay Magazine

volume 10 • spring 2017
Paybefore: Let’s set the stage. What kinds of businesses apply for e-money licenses in Europe? Who are we talking about?
Craig James: Predominantly, it’s ntechs that see a market
for payment methods that don’t require traditional banking. They come to payments with the recog- nition that banks have let consum- ers down, leaving a service gap. An e-money license enables them to ll that gap and o er relatively inexpensive, exible services that make payments faster and more convenient for consumers— particularly those who, for what- ever reason, are excluded from the nancial mainstream—and still turn a reasonable pro t.
E-money institutions or EMIs— that is, businesses holding e-money licenses—can, for example, o er travel funds on cards with lower fees and better exchange rates than travelers’ checks or bank debit or credit cards. And prepaid cards from EMIs are a brilliant way for cor- porates to manage spend, like employee expenses. Other big areas for e-money are online spend and fuel cards.
Robert Courtneidge:
I’ll just point out the obvious: Not all ntechs are involved in payments or e-money, so there’s no need for them to obtain li- censes. It’s the classic setup:
All EMIs are ntechs but not
all ntechs are EMIs.
Paybefore: So, what was the problem e-money licensing was intended to solve?
RC: The e-money concept origi- nated in the mid-’90s and was associated with stored value
on a chip. Over time, e-money has been rede ned by industry and regulators through an evolv- ing series of directives. We’ve
all learned as the market has evolved. Today, e-money is all about payment accounts and payment services; that is,
creating banking-like solutions that allow more players into the market to compete with banks and with each other. And, today e-money is technology-agnostic, so it’s not tied to a chip, for ex- ample. As Craig said, e-money licensing addressed the hold banks had on payments so, now, consumers are better served through greater competition
and better pricing.
Paybefore: How long does it take to get licensed?
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Craig James is CEO of Neopay, a market-leading provider of compliance solutions to e-money and payment institu- tions, with o ces in London and Los Angeles. A special- ist in e-money, and prepaid AML and nancial services compliance, Craig is a frequent and popular speaker at payments conferences worldwide and has assisted in
the presentation of Pay Awards in the U.S. and Europe. Since 2014, he also has served as chairman of the board of the Prepaid International Forum, a London-based nonpro t trade association for the prepaid industry.
He may be reached at craigjames@neopay.co.uk.
Robert Courtneidge is global head of cards and payments for the Texas-based law rm Locke Lord. From the rm’s London o ce, Robert works with nancial services and tech clients worldwide, as well as with the U.K.’s Financial Conduct Authority and HM Treasury. He sits on the boards or advises a dozen international payments rms. In 2016, Robert was named to the Payments Power 10 for the fth consecutive year. In 2015, he was named a Top 10 Payments Lawyer by Paybefore. He is a co-founder and past-chairman of the Prepaid International Forum and may be reached at RCourtneidge@lockelord.com.