it-analysis: UK leads e-Money revolution
According to this report, the UK has implemented an EU directive concering the issuing of electronic money. Note that this doesn’t specify protocols, or even define a type of money, like digital cash; it requires that a banking license be held by anyone issuing electronic money. Contrast this with the US position that says PayPal is not a bank (despite earlier attempts to shut it down on licensing grounds).
As of E-Day, anybody that wishes to issue electronic money can do so as long as they satisfy a number of core criteria specified by the Financial Services Authority (FSA), without having to first obtain a banking license. In essence this means that as long as the issuers of the e-money can meet the capital requirements of one million Euros or 2 percent of the e-money to be issued, they are free to do so. There is a limit of one thousand pounds sterling on the maximum ‘purse’ value; the e-money must be redeemable within five days and the currency must be usable for at least one year.It is widely expected that a number of companies, from mobile phone giants, credit card organisations and even the Post Office, are actively considering launching their own e-money offerings. However, any organisation meeting the basic FSA criteria can set up e-money for themselves. Indeed, at the small scale end of the market some of the more onerous requirements can be waived. Such a waiver could make it possible for a school or small business to set up cashless payment systems internally without having to possess a million Euro worth of capital in the first place.