The European Commission's DG Internal Market has published a "Consultation paper on the treatment of mobile operators under the E-money Directive", which considers in particular the nature of prepaid cards.

Electronic money is defined in the E-Money Directive (2000/46/EU) as "monetary value stored on a chip card (prepaid card or 'electronic purse') or on a computer memory (network or software money) and which is accepted as a means of payment by undertakings other than the issuer".

According to the European Commission services, and experts from Member States which have met to discuss this specific topic, prepaid mobile phone cards are likely to be a form of electronic money when they are used to buy and pay for third party products or services, i.e. not the mobile phone service itself.

The implication is that stringent financial service industry regulation may be applicable to the issuers of prepaid cards.

The consultation is mainly addressed towards mobile operators, but comments are also invited from connected industry (content providers, companies developing technology, other partners of mobile operators in the offer of additional product or services etc.) and from consumers.

The deadline for responses is 16 July 2004.

The full text of the European Commission consultation document can be accessed by clicking here.