eMoney

The issuing of online money or transfer instruments is, in some countries, possible under an eMoney licence without the requirement for a full banking licence. Depending on the country of operation the licensable activity may be either the origination or merely the order matching or reselling of electronic payment instruments. Electronic payment instruments are usually defined as any means of payment which can be used to pay a third-party (so the issuing by a company of vouchers for its own services is likely to be excluded from licensing). This includes the provision of digital credit cards, vouchers against digital credit cards, the digitisation of physical credit cards and vouchers redeemable against other online cash equivalents such as digital wallets or payment gateways.

Licensing Process
The licensing process varies considerably from country to country but is likely to include consideration such as skill, competency, fitness as well as the payment of a licence. There will also be minimum balance/capital requirements and there may be a requirement for the appointment of local staff (especially compliance staff) and auditors.

Choice of Country
The most important factor is the existence of an eMoney licence distinct from a banking licence.

Reputation and Regulatory Infrastructure The reputation of country is an important consideration and clients must be cautious to avoid capricious or unpredictable regulators as much as overly interfering regulators or those which make the licensing requirements too onerous. Consideration should be given to what level of outsourcing is permissible. Taxation and Regulatory Cost For many clients the most important consideration will be cost based. Cost will be determined with regard to capital costs on establishment, licence fee, the appointment of local persons if required as well as any ongoing costs of operation such as local person, and cost premises if necessary but principally based on tax rates.  Consideration should also be given to timescale to licensing and capital requirements.

Other Considerations

Currency/Banking Sector
It is important to choose a country with a reliable banking sector to support the operations of the eMoney issuer or seller.

Human-Resource Infrastructure
Where operations are not outsourced (as may be a requirement under the licence) it is important to ensure that the country has suitable human resources. Consideration should be given to the local languages, market conditions (including salaries and competitiveness) and level of technical expertise available.