Most people associate the word ‘passport’ with a leather bound document enabling individuals to travel to foreign countries. For the people at hyperWALLET and those at other international payments companies, the term passport often means something else, especially when discussing payments in Europe.
Under the member state regulations issued pursuant to Europe’s E-Money and Payment Services Directives, licensed and regulated alternative financial services providers may provide their services throughout the EU, so long as they have properly ‘passported’ their license wherever they wish to do business. Passporting a financial services license is accomplished through a fairly quick and easy application process in all the other countries where the authorized institution wishes to operate. It is a much better approach than applying for distinct licenses in each country.
In addition, through a patchwork of EU member state laws, governments regulate ‘Electronic Money’ somewhat differently than mere ‘Payments Services’. The line between Electronic Money and Payments Services can be difficult to ascertain when commission payments flow from hyperWALLET’s patented e-wallet platform to payment cards (widely considered Electronic Money) and bank accounts (widely considered payment services) and other means. Understanding the regulatory nuances when a single commission payment is delivered to a direct selling company’s European sales representative with an address and prepaid card registered in the UK and a bank account registered in France is a requirement, not an option.
In addition to navigating the shifting sands of Europe’s payments regulations, hyperWALLET follows the payments laws in other jurisdictions where we help our clients deliver their commission payments. Untangling the web of international payments regulations is no small task. Through its own accounts, those of its clients and its network partners, hyperWALLET sends a combination of local bank transfers, international wire transfers, prepaid cards, Western Union cash pick-ups and so-called mobile money payments to 170+ countries. While this requires significant operational and technical prowess, our banks, card issuers and other network partners (and their financial services providers!) frequently mandate that we explain and substantiate our regulatory positions in many exotic locales and of course, Canada.
In the United States, payments and cards are regulated through a combination of not-always-uniform state laws and federal regulations. In Canada, new card laws are pending and significant revisions to anti-money laundering regulations are on the way. Did we mention Hong Kong? Or Singapore? Or Malaysia? Or Australia? Or Russia?
When making payments around the world through a multitude of technologies, one doesn’t always need a passport, but a solid foundation in international payments law and next generation payments law is a must!