EBA Q&A 2019_5044 — Q&A — Recording of e-money [Final Q&A]

Recording of e-money

Question

If a card issued by an E-money institution has a cash function, how should the cash withdrawal from that card be recorded? Should it be recorded on the debit card withdrawal, as the E-money breakdown section does not include a cash withdrawal category?

Background

We have been asked by an E-money institution how to record the cash withdrawals from cards issued by an E-money institution but with a cash function. We would appreciate you support on this.

According to GL 1.5, payment service providers (PSPs) should report under Table F “transactions and fraudulent transactions where e-money has been transferred by an e-money provider to a beneficiary account”. Cash withdrawals with e-money cards are not considered as “transfers” within the meaning of GL 1.5.

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Answer

In accordance with Guideline 7.15 of the EBA Guidelines on fraud reporting under PSD2 (EBA/GL/2018/05) as amended by the EBA Guidelines EBA/GL/2020/01, cash withdrawals and fraudulent cash withdrawals using a card at ATMs, at bank counters and through retailers (‘cash back’), should be reported by the issuing payment service provider (the issuer) in accordance with the Data Breakdown E in Annex 2 of the Guidelines.

As regards reporting of e-money payment transactions, Guideline 7.2 provides that “when providing data on e-money transactions, the payment service provider (PSP) should include e-money payment transactions: a. where the PSP is identical to the payee’s PSP, or b. where a card with an e-money functionality is used.” However, this Guideline should be interpreted in conjunction with Guideline 1.5 which provides that “transactions and fraudulent transactions where e-money has been transferred by an e-money provider to a beneficiary account” should be reported in accordance with the Data Breakdown F. Cash withdrawals with e-money cards are not considered as “transfers” within the meaning of Guideline 1.5.

Accordingly, cash withdrawals using cards with an e-money function, where the user redeems the e-money stored on the card by withdrawing funds, are out of scope of reporting under the EBA Guidelines on fraud reporting. By contrast, cash withdrawals using a payment card with a non e-money function, should be reported in accordance with Guideline 7.15 under the Data Breakdown E.

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Source: EBA original document