62022CC0661
OPINION OF ADVOCATE GENERAL
CAMPOS SÁNCHEZ-BORDONA
delivered on 5 October 2023 (
1
)
Case C‑661/22
ABC Projektai UAB, formerly Bruc Bond UAB
v
Lietuvos bankas
(Request for a preliminary ruling from the Lietuvos vyriausiasis administracinis teismas (Supreme Administrative Court of Lithuania))
(Reference for a preliminary ruling – Activity of a payment institution consisting of the holding of customers’ funds without a specific payment order for longer than the statutory time limit for carrying out a payment transaction – Classification of the activity – Directive (EU) 2015/2366 – Payment services in the internal market – Directive 2009/110/EC – Issuance of electronic money)
1.
The case-law of the Court on the Payment Services Directives (
2
) is gradually developing, (
3
) but, unless I am mistaken, the Court has so far given only one judgment (
4
) interpreting Directive 2009/110/EC, (
5
) relating to electronic money.
2.
This reference for a preliminary ruling will enable the Court to clarify the definition of ‘electronic money’. In particular, the Court will have to determine whether there is an issuance of electronic money (an activity therefore subject to Directive 2009/110) where a payment service provider (‘PSP’) receives funds without a specific payment order and holds those funds for longer than the statutory period.
I. Legal framework
A.
European Union law
1. Directive 2015/2366
3.
Article 4 (‘Definitions’) provides:
‘For the purposes of this Directive, the following definitions apply:
…
(3)
“payment service” means any business activity set out in Annex I;
(4)
“payment institution” means a legal person that has been granted authorisation in accordance with Article 11 to provide and execute payment services throughout the Union;
(5)
“payment transaction” means an act, initiated by the payer or on his behalf or by the payee, of placing, transferring or withdrawing funds, irrespective of any underlying obligations between the payer and the payee;
…
(13)
“payment order” means an instruction by a payer or payee to its payment service provider requesting the execution of a payment transaction;
…’
4.
Article 18 (‘Activities’) reads:
‘1.   Apart from the provision of payment services, payment institutions shall be entitled to engage in the following activities:
(a)
the provision of operational and closely related ancillary services such as ensuring the execution of payment transactions, foreign exchange services, safekeeping activities, and the storage and processing of data;
(b)
the operation of payment systems, without prejudice to Article 35;
(c)
business activities other than the provision of payment services, having regard to applicable Union and national law.
2.   Where payment institutions engage in the provision of one or more payment services, they may hold only payment accounts which are used exclusively for payment transactions.
3.   Any funds received by payment institutions from payment service users with a view to the provision of payment services shall not constitute a deposit or other repayable funds within the meaning of Article 9 of Directive 2013/36/EU [of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ 2013 L 176, p. 338)], or electronic money as defined in point (2) of Article 2 of Directive 2009/110/EC.
…
5.   Payment institutions shall not conduct the business of taking deposits or other repayable funds within the meaning of Article 9 of Directive 2013/36/EU.
…’
5.
Paragraph 1 of Article 78 (‘Receipt of payment orders’) provides:
‘Member States shall ensure that the time of receipt is when the payment order is received by the payer’s payment service provider.
The payer’s account shall not be debited before receipt of the payment order. …’
6.
Paragraph 1 of Article 83 (‘Payment transactions to a payment account’) states:
‘Member States shall require the payer’s payment service provider to ensure that after the time of receipt as referred to in Article 78, the amount of the payment transaction will be credited to the payee’s payment service provider’s account by the end of the following business day. That time limit may be extended by a further business day for paper-initiated payment transactions.’
2. Directive 2009/110
7.
In accordance with Article 2 (‘Definitions’):
‘For the purposes of this Directive, the following definitions shall apply:
1.
“electronic money institution” means a legal person that has been granted authorisation under Title II to issue electronic money;
2.
“electronic money” means electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions as defined in point 5 of Article 4 of Directive 2007/64/EC [of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive 97/5/EC (OJ 2007 L 319, p. 1)], and which is accepted by a natural or legal person other than the electronic money issuer;
…’
8.
Article 10 (‘Prohibition from issuing electronic money’) is worded as follows:
‘Without prejudice to Article 18, Member States shall prohibit natural or legal persons who are not electronic money issuers from issuing electronic money.’
9.
In accordance with Article 11 (‘Issuance and redeemability’):
‘1.   Member States shall ensure that electronic money issuers issue electronic money at par value on the receipt of funds.
2.   Member States shall ensure that, upon request by the electronic money holder, electronic money issuers redeem, at any moment and at par value, the monetary value of the electronic money held.
3.   The contract between the electronic money issuer and the electronic money holder shall clearly and prominently state the conditions of redemption, including any fees relating thereto, and the electronic money holder shall be informed of those conditions before being bound by any contract or offer.
…’
B.
National law
1. Law on payments (
6
)
10.
Pursuant to Article 2(11) and (40), respectively, ‘payee’ means any natural or legal person, other entity or subdivision of an entity which appears on a payment order as the recipient of the funds to which the payment transaction relates; and ‘payer’ means a natural or legal person, other entity or subdivision of an entity which is the holder of a payment account and authorises a payment order from that account or, where no payment account exists, which issues a payment order.
11.
Under Article 5, the following are payment services: payment transactions, including transfers of funds through a payment account with the user’s payment service provider or with another payment service provider; direct debits, including one-off direct debits; payment transactions through a payment card or a similar device; or transfers, including standing orders (point 3); and money transfers (point 6).
12.
In accordance with Article 6(3), payment institutions form part of payment service providers.
13.
Article 38(1) provides that the payer’s payment service provider is to refund the payer the amount of an unauthorised payment transaction immediately after it has become aware of or has been informed of the transaction, by the end of the next business day at the latest, and that, where necessary, it is to restore the payment account from which the amount was debited to the state in which it would have been had the unauthorised payment transaction not been carried out, unless the payer’s payment service provider has reasonable grounds to suspect the existence of fraud and communicates those grounds in writing to the supervisory authority. The payer’s payment service provider must also ensure that the payer does not incur any losses as a result of interest owed to or by the payment service provider.
14.
Article 42(2) states that a payment service user which initiates a payment order and its payment service provider may agree that execution of the payment order is to commence on a specified day, at the end of a specified period or on the day on which the payer made the funds available to the payment service provider. In such a case, the date thus agreed will be treated as the date of receipt of the payment order. Where the agreed date is not a business day for the payment service provider, the payment order will be deemed to have been received on the next business day.
15.
Article 46(1) provides that the payer’s payment service provider must ensure that, once the payment order is received, the amount of a payment transaction in euro carried out in Lithuania and destined for another Member State is credited to the account of the payee’s payment service provider by the end of the next business day, except in the situation set out in Article 46(3). That time limit may be extended by one additional business day where the payment transaction is initiated on paper.
16.
Article 46(3) stipulates that, when transfers in euro are carried out in Lithuania, the payer’s payment service provider must ensure that, once the payment order has been received, the amount of the payment transaction is credited to the account of the payee’s payment service provider on the same day, where the payment order has been received on a business day before 12.00. Where the payment order has been received after 12.00, the payer’s payment service provider must ensure that the amount of the payment transaction is credited to the account of the payee’s payment service provider by the next business day at the latest. In the situation provided for in Article 42(2) of that law, the payer’s payment service provider is to ensure that the amount of the payment transaction is credited to the account of the payee’s payment service provider on the date of execution of the payment order, and, where that day is not a business day for the payment service provider, on the next business day.
2. Law on payment institutions (
7
)
17.
Article 4(3) states that a payment institution which provides one or more payment services may hold payment accounts intended solely for the provision of payment services. Funds received by a payment institution from payment service users for the provision of payment services do not constitute deposits or other repayable funds or electronic money.
18.
Article 4(5) provides that a payment institution may not receive deposits or other repayable funds from non-professional market operators or issue electronic money.
3. Law on electronic money (
8
)
19.
In accordance with Article 2(1), ‘electronic money’ is defined as monetary value, as represented by a claim on the issuer, which is put into circulation when funds are transferred to the issuer by natural or legal persons and which has the following characteristics: it is to be stored in electronic, including magnetic, format, for payment purposes and will be accepted by persons who are not electronic money issuers.
20.
Article 5 prohibits any natural or legal person which is not an electronic money issuer from issuing electronic money.
21.
Article 6(1) states that issuers of electronic money are to issue electronic money at its par value after funds have been received from natural or legal persons.
II. Facts, dispute and question referred for a preliminary ruling
22.
Bruc Bond UAB (subsequently, ABC Projektai UAB) (
9
) was an institution licensed by Lietuvos bankas (Bank of Lithuania) to provide payment services. (
10
)
23.
On 16 April 2020, the Bank of Lithuania revoked the licence of ABC Projektai, relying on 10 grounds; only 1 of those grounds has a bearing on this reference for a preliminary ruling, specifically, that ABC Projektai issued electronic money without being an electronic money institution (‘EMI’).
24.
According to the Bank of Lithuania, ABC Projektai had retained customers’ funds for longer than the time required for the execution of payment transactions or for technical reasons. (
11
) As from 20 February 2017, the accounts of six of ABC Projektai’s customers were credited with funds received by customers (incoming payments) without a specific payment purpose, and transfers of funds (outgoing payments) did not take place for several days (or, in some cases, months), (
12
) with the exception of ABC Projektai’s fees.
25.
In the Bank of Lithuania’s view, that conduct amounted to the issuance of electronic money, although ABC Projektai maintains that it advised its customers of the need to send payment orders and that, if it did not receive a payment order, it would proceed to return funds, which it asserts that it did.
26.
ABC Projektai brought an action against the Bank of Lithuania’s decision before the Vilniaus apygardos administracinis teismas (Regional Administrative Court, Vilnius, Lithuania), which dismissed the action on 8 June 2021.
27.
ABC Projektai appealed against the first-instance judgment to the Lietuvos vyriausiasis administracinis teismas (Supreme Administrative Court of Lithuania). It submits, in short, that, where a payment service is not provided by an EMI and is not concerned with the issuance or redemption of the par value of electronic services, it does not constitute an activity related to the issuance of electronic money.
28.
The Bank of Lithuania contests the appeal, insisting that ABC Projektai issued electronic money without being authorised to do so. It submits that this follows from the position adopted by the Supervisory Board of the Bank of Lithuania in respect of funds held in payment accounts. (
13
) It adds that that position was adopted in agreement with the European Commission.
29.
Against that background, the Lietuvos vyriausiasis administracinis teismas (Supreme Administrative Court of Lithuania) has referred the following question to the Court of Justice for a preliminary ruling:
‘In circumstances such as those in the main proceedings, where a payment institution accepts funds without a specific payment order to transfer them on the same or following business day and the funds remain in the payment institution’s account intended for carrying out payment transactions for longer than the time limits for the execution of the payment service laid down by the legislation, are the actions of the payment institution to be regarded as:
(a)
a part of a payment service or a payment transaction, as defined in points 3 and 5 of Article 4 of [Directive 2015/2366]; or
(b)
the issuance of electronic money as defined in point 2 of Article 2 of [Directive 2009/110]?’
III. Procedure before the Court of Justice
30.
The request for a preliminary ruling was received at the Registry of the Court on 20 October 2022.
31.
Written observations were lodged by ABC Projektai, the German, Czech, Polish and Lithuanian Governments, and the European Commission.
32.
It was not considered necessary to hold a hearing.
IV. Assessment
A.
Preliminary considerations: applicable definitions
1. Electronic money
33.
Digital evolution is leading to a major overhaul of the provision of financial services and the retail payment sector is at the forefront of that trend. (
14
) EU legislation, most notably Directive 2015/2366, is barely able to contain that rapid technological change (
15
) and, therefore, the Commission has proposed the repeal of the directive and its replacement by another. (
16
)
34.
One of the innovations in the provision of payment services was the emergence of electronic money, which is issued by EMIs and is now widespread. (
17
) The arrangements for this were governed by Directive 2000/46/EC (
18
) until it was repealed by Directive 2009/110, which is now in force.
35.
Directive 2009/110 updated the definition of electronic money to make it clearer and technically neutral. (
19
) According to the definition in Article 2(2) of that directive, the term ‘electronic money’ means electronically, including magnetically, stored monetary value (
20
) which:
–
is represented by a claim on the issuer;
–
is issued on receipt of funds for the purpose of making payment transactions; and
–
is accepted by a natural or legal person other than the electronic money issuer. (
21
)
36.
Electronic money products can be hardware- or software-based, depending on the technology used to store the monetary value. Schemes mixing both hardware- and software-based features also exist.
37.
In the case of hardware-based products, the purchasing power resides in a personal physical device, such as a chip card, with hardware-based security features. Monetary values are typically transferred by means of device readers that do not need real-time network connectivity to a remote server.
38.
Software-based products employ specialised software that functions on common personal devices such as personal computers or tablets. To enable the transfer of monetary values, the personal device typically needs to establish an online connection with a remote server that controls the use of the purchasing power.
39.
The legal rules applicable to electronic money, on the one hand, and payment services, on the other, are laid down in two different but interrelated directives, (
22
) the separate existence of which is being reconsidered. (
23
)
2. Payment service, payment transaction and payment account
40.
Article 4 of Directive 2015/2366 contains definitions of the concepts used in its enacting terms. In so far as is important for these proceedings:
–
Article 4(3) defines ‘payment service’ as any business activity set out in Annex I. At least three of those activities involve actions on a payment account. (
24
)
–
Article 4(5) defines ‘payment transaction’ as an act, initiated by the payer or on his or her behalf or by the payee, of placing, transferring or withdrawing funds, irrespective of any underlying obligations between the payer and the payee.
–
Article 4(12) defines ‘payment account’ as an account held in the name of one or more payment service users which is used for the execution of payment transactions. (
25
)
B.
Analysis of the question referred for a preliminary ruling
41.
The referring court sets out clearly the situation before it. It describes the activities of a payment institution which:
–
accepts funds without a specific payment order to transfer those funds on the same or the next business day; and
–
holds those funds in its own account for longer than the time limit for the provision of payment services laid down by Lithuanian legislation.
42.
Based on those facts, the referring court asks whether the activities thus described should fall within the scope of Directive 2015/2366 or, rather, should be classified as the issuance of electronic money (
26
) pursuant to Directive 2009/110. (
27
)
43.
Directive 2015/2366 lays down provisions on the execution of payment transactions where funds are in the form of electronic money. However, that directive does not govern the issuance of electronic money covered by Directive 2009/110. PSPs are not, as such, authorised to issue electronic money, an activity which requires a specific licence.
44.
Article 18 of Directive 2015/2366 states that:
–
payment institutions which engage in the provision of one or more payment services (
28
) may hold only payment accounts (
29
) which are used exclusively for payment transactions (paragraph 2);
–
‘any funds received by payment institutions from payment service users with a view to the provision of payment services shall not constitute a deposit or other repayable funds … or electronic money …’ (paragraph 3).
45.
In the considerations below, I shall argue that the holding, by a payment institution, of funds received from a user is, in principle, an activity which entails the operation of a payment account. In my view, that characteristic is not lost where those funds are kept for longer than the statutory period for execution of payment orders against them. (
30
)
46.
Accordingly, the activity described by the referring court constitutes, at first sight, a payment service within the meaning of Article 4(3) of and Annex I to Directive 2015/2366.
47.
Is there a (theoretical) possibility that that activity could entail the issuance of electronic money, covered by Directive 2009/110?
48.
To answer that question, it is necessary to examine, first, the effect of the fact that there is a specific time limit for a PSP to execute payment orders received from a user and, secondly, whether the activity described in the order for reference can be included among those subject to Directive 2009/110.
1. Time limit for execution of payment orders
49.
Article 83(1) of Directive 2015/2366 lays down a short period within which a payer’s PSP is to credit the amount of the payment transaction to the payee’s account (more specifically, to the account of the payee’s PSP). (
31
)
50.
That period starts to run from the time of receipt of the payment order. Pursuant to Article 78(2), the PSP and the payer may agree another date as ‘the time of receipt for the purposes of Article 83’ of Directive 2015/2366. (
32
)
51.
As the Czech Government states, (
33
) the provision in Article 78(2) of Directive 2015/2366 would be rendered meaningless if PSPs were under an obligation to comply with the time limit in Article 83(1) with effect from the receipt of funds and not from the receipt of the payer’s payment order.
52.
The time limit for execution in Article 83 of Directive 2015/2366 starts to run as soon as the payment order is received, and not when the payment account holder transfers funds to that account. In other words, the period does not start at the time of receipt of funds if the payer has not issued a payment order from those funds.
53.
The link between the period for execution of the payment transaction and receipt of the payment order ensures that a PSP acts in accordance with an act initiated by the payer (Article 4(5) of Directive 2015/2366) or with an instruction by the payer (Article 4(13) of Directive 2015/2366).
54.
That link means that the holder may (as frequently occurs) transfer funds to its payment account without, as yet, an accompanying payment order. The holder is authorised to keep funds in the account which will be used to execute future payment orders. Logically, a PSP will not be able to execute a payment order received if there are no funds in the payer’s payment account.
55.
On the same lines, Directive 2015/2366 refers to instances of payment services which, for their proper execution, require the ‘continuous’ availability of funds in the payment account. For example, the execution of direct debits (
34
) necessitates, to a certain extent, the continuous availability of funds in the payment account: it would be highly impractical for a user to transfer funds a very short time in advance for each debit, with the added risk that the amount of the debit might change.
56.
The requirement of the continuous availability of funds in a payment account is also clear in cases such as that in Article 78(2) of Directive 2015/2366, which provides for the execution of payment orders a posteriori and within an agreed period.
57.
The Lithuanian Government and the referring court appear to suggest, by contrast, that there is an issuance of electronic money where a PSP receives funds in a payment account without the holder transmitting payment orders for execution, in which case the PSP should proceed to repay those funds rather than hold them (in readiness) in the payment account. That was the Bank of Lithuania’s complaint to ABC Projektai.
58.
I believe that that argument, as regards the conversion of funds into electronic money, is not supported by Directive 2015/2263.
59.
In my opinion, a PSP will infringe that directive, (
35
) but will remain within its scope, if it receives payment orders and does not execute those orders in accordance with Articles 78 and 83 of the directive. By infringing the contractual provisions applicable to the operation of a payment account, a PSP may also incur the liability provided for in Article 89 of Directive 2015/2366, but that is not the reason why funds would be converted into electronic money. Such a conversion does not occur merely because funds have been transferred to a payment account and are kept in that account for the execution of future payment orders.
60.
With the exception of expressly defined cases, Directive 2015/2366 provides for complete harmonisation (Article 107(1)). Accordingly, any national provisions which are contrary to the directive must be disapplied, such as where a Member State sets a compulsory period within which PSPs must execute payment orders following the receipt of funds in a payer’s account.
61.
Article 10 of Directive 2015/2366 requires that the funds of payment service users which are held by a PSP must be safeguarded, by ensuring: (a) either that those funds are not commingled with the funds of any natural or legal person other than payment service users on whose behalf the funds are held, (b) or that the funds are covered by an insurance policy or some other comparable guarantee from an insurance company or a credit institution, which does not belong to the same group as the PSP itself.
62.
Accordingly, there is no risk to the user where that user transfers to or keeps funds in a payment account for a period of time and later issues a payment order against those funds. It will be upon receipt of that payment order that the PSP will have to proceed to execute the order with the speed required by Article 83 of Directive 2015/2366.
63.
Funds received by PSPs from users who have a payment account may be used only for payment transactions (Article 18(2) of Directive 2015/2366). Therefore, those funds must always be available and under the control of the account holder, which will not receive interest if it keeps the funds in the account to carry out future payment transactions. Those funds, as I observed when transcribing Article 18(3) of Directive 2015/2366, do not constitute deposits or other repayable funds for the purposes of Article 9 of Directive 2013/36, or electronic money.
2. Decisive criteria for the issuance of electronic money
64.
It may be inferred from the definition contained in Directive 2009/110 and from other provisions of that directive that the issuance of electronic money involves the following criteria: (
36
)
–
the user makes funds available to the EMI and the EMI creates a supplementary asset in an amount no lower than that monetary value. Prepayment is the starting point for the issuance of electronic money;
–
the user and the EMI conclude a contract pursuant to which the latter issues electronic money with a view to carrying out payment transactions. The purpose of the electronic money is to serve as a payment instrument that the user will issue to a person who accepts that type of money;
–
electronic money is stored electronically or magnetically;
–
monetary value represents a claim on the issuer by the user. The issuer is required to repay that value, (
37
) upon request by the holder; (
38
)
–
electronic money is accepted as a means of payment by a natural or legal person other than the issuer.
65.
In my view, which is largely the same as that of ABC Projektai, the German, Czech and Polish Governments and the Commission, in the circumstances described by the referring court a number of the essential criteria for treating ABC Projektai’s activity as constituting the issuance of electronic money are not met.
66.
First, as I explained above, the issuance of electronic money requires specific agreement, set out in a contract. The user must agree with the EMI to provide it, in that format, with the corresponding funds for the purposes of carrying out payment transactions. The EMI issues electronic money because the user expresses its wish to avail itself of that model and transfers those funds to the EMI to be used for its subsequent payments.
67.
Subject to the referring court’s final assessment, nothing in the case file suggests that such a contract existed or that the user expressed its wish that ABC Projektai should issue electronic money for the monetary value of the funds transferred. The transfer of funds to a payment account and the holding of those funds in that account without immediately mandating any payment operations to the value of those funds does not entail a (tacit) expression of the user’s wish for the issuance of electronic money.
68.
It is true that the subjective component, that is to say the purpose (
39
) pursued by the user would not be decisive in itself if it were not set out in a contract with the EMI; that contract is a structural (and, by the same token, objective) element of the issuance of electronic money.
69.
The wishes of both parties must be made clear in that contract, such that the user and the EMI expressly agree that the latter is to issue electronic money for the monetary value of the funds received from the former. Otherwise, there would be a transfer of funds to a payment account so that the PSP or the EMI itself (
40
) could carry out payment services on behalf of the user.
70.
Secondly, the prepayment requirement, which is another distinguishing feature of electronic money, is not fulfilled in the circumstances described by the referring court either. As a result of prepayment, the EMI has control of the funds transferred to it by the user in order to make subsequent payments once those funds have been converted into electronic money.
71.
When electronic money is issued, control of the funds rests with the EMI (
41
) and not with the user who uses the monetary value as a payment instrument. The EMI controls, until the end of the contract, any funds received from the user (
42
) in the form of electronically stored monetary value. Electronic money is a supplementary asset which the EMI creates on the basis of those funds.
72.
However, where payment services are provided on the basis of a payment account, it is the user and not the PSP which controls the funds transferred to that account at all times.
73.
In this case, subject to the referring court’s assessment, it does not appear that ABC Projektai had control of the funds in the payment accounts but rather the holders of those accounts, who were able at any time to send ABC Projektai payment orders for execution.
74.
Thirdly, since electronic money is a supplementary asset controlled by an EMI, that institution must have a specific accounting system which enables the application of the particular method of calculating its own funds provided for in Article 5(3) of Directive 2009/110.
75.
It is for the referring court to verify whether ABC Projektai had that specific accounting system for electronic money and for calculation of the own funds requirements, a matter which it is not possible to deduce from the information supplied to the Court.
76.
Fourthly, with payment accounts, the holder has control of the funds, as I indicated above, and may withdraw those funds as it wishes. In the case of electronic money, there is also the possibility that the payer may ask the EMI for ‘redemption’ of what it has not used to make payments to third parties. However, the reconversion of electronic money to its par value and the subsequent payment of funds on the instructions of the electronic money holder will be dependent on the conditions laid down in the contract between the user and the EMI, which may provide, for example, for the payment of fees by the customer in the case of early redemption. (
43
)
77.
That is what Article 11(3) and (4) of Directive 2009/110 states when it provides that:
–
the contract between the electronic money issuer and the electronic money holder shall clearly and prominently state the conditions of redemption, including any fees relating thereto, and the electronic money holder shall be informed of those conditions before being bound by any contract or offer; and
–
redemption may be subject to a fee only if stated in the contract in accordance with paragraph 3 and only in any of the following cases: (a) where redemption is requested before the termination of the contract; (b) where the contract provides for a termination date and the electronic money holder terminates the contract before that date; or (c) where redemption is requested more than one year after (
44
) the date of termination of the contract. Any such fee shall be proportionate and commensurate with the actual costs incurred by the electronic money issuer.
78.
It is, once again, the responsibility of the referring court to establish whether there was a contract between the user and the EMI in which those clear and prominent conditions of redemption were stated, as a prerequisite for the issuance of electronic money.
79.
Fifthly, electronic money is stored electronically or magnetically and may only be used in relation to users who accept it voluntarily (
45
) and have instruments for its use. By contrast, payment orders executed from a payment account must be accepted by the PSPs of all economic operators.
80.
The information available in the case file does not suggest that ABC Projektai held electronically or magnetically money which could be used with a network of customers who accepted it voluntarily. On the contrary, all the indications are that funds were deposited in payment accounts and could be used only to execute payment orders from users.
81.
In short, subject to the referring court’s findings, the activity at issue falls within the scope of Directive 2015/2366 and cannot be classified as the issuance of electronic money within the meaning of Directive 2009/110.
V. Conclusion
82.
In the light of the foregoing considerations, I propose that the Court of Justice give the following reply to the Lietuvos vyriausiasis administracinis teismas (Supreme Administrative Court of Lithuania):
Article 2(2) of Directive 2009/110/EC of the European Parliament and of the Council of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutions amending Directives 2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC and Article 4(3) and (5) of Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC
are to be interpreted as meaning that the activity of a payment institution consisting of accepting funds from a user without having concluded a contract to issue electronic money from those funds is not governed by Directive 2009/110 but rather by Directive 2015/2366.
That is also the case where, in the absence of the contract referred to, a payment institution accepts funds from a user without a specific payment order to transfer those funds on the same or following business day and the funds remain in the payment institution’s account intended for carrying out payment transactions for longer than the time limits for the execution of the payment service laid down by the legislation.
(
1
)	Original language: Spanish.
(
2
)	The directive currently in force is Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC (OJ 2015 L 337, p. 35).
(
3
)	Inter alia, judgments of 9 April 2014, T-Mobile Austria (C‑616/11, EU:C:2014:242); of 4 October 2018, ING-DiBa Direktbank Austria (C‑191/17, EU:C:2018:809); of 11 April 2019, Mediterranean Shipping Company (Portugal) – Agentes de Navegação (C‑295/18, EU:C:2019:320); of 11 November 2020, DenizBank (C‑287/19, EU:C:2020:897); of 2 September 2021, CRCAM (C‑337/20, EU:C:2021:671); and of 23 March 2023, Beobank (C‑351/21, EU:C:2023:215).
(
4
)	Judgment of 16 January 2019, Paysera LT (C‑389/17, EU:C:2019:25; ‘the judgment in Paysera LT’).
(
5
)	Directive of the European Parliament and of the Council of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutions amending Directives 2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC (OJ 2009 L 267, p. 7).
(
6
)	Lietuvos Respublikos mokėjimų įstatymas (Republic of Lithuania Law on payments), in the version applicable to the dispute, in force from 20 October 2019. That law transposes Directive 2015/2366 into national law.
(
7
)	Lietuvos Respublikos mokėjimo įstaigų įstatymas (Republic of Lithuania Law on payment institutions), in the version applicable to the dispute, in force from 1 August 2018.
(
8
)	Lietuvos Respublikos elektroninių pinigų ir elektroninių pinigų įstaigų įstatymas (Republic of Lithuania Law on electronic money and electronic money institutions), in the version applicable to the dispute, in force from 1 August 2018. That law transposes Directive 2009/110 into Lithuanian law.
(
9
)	From now on, I shall use the new name to refer to the institution.
(
10
)	The licence of 13 October 2016 allowed it to offer the following payment services: execution of payment transactions, including transfers of funds, through a payment account with the user’s PSP or with another PSP; execution of direct debits, including one-off direct debits; execution of payment transactions through a payment card or a similar device; and execution of transfers, including standing orders and money transfers.
(
11
)	It is common ground between the parties that ABC Projektai kept funds for longer than necessary, although it was established that, in some cases, ABC Projektai was unable to execute payment orders because customers had not specified the purpose of payment. Furthermore, it has been established that ABC Projektai has returned all the funds transferred to it without a payment order.
(
12
)	ABC Projektai’s business plan states that that institution does not control funds for longer than necessary to carry out transactions; that funds are held in the account for no longer than 48 hours; and that they are returned to the payer if no payment order is issued within that period. The Bank of Lithuania claims that ABC Projektai failed to comply with those conditions.
(
13
)	Namely, the Lietuvos Banko Priežiūros tarnybos pozicija dėl mokėjimo sąskaitose laikomų lėšų (Position of the Supervisory Board of the Bank of Lithuania on funds held in payment accounts), adopted by the Lietuvos banko Priežiūros tarnybos direktoriaus 2016 m. vasario 29 d. sprendimas Nr. 241‑53 (Decision No 241‑53 of the Director of the Supervisory Board of the Bank of Lithuania of 29 February 2016). According to the order for reference, that position states that a PSP ‘may accept funds into a payment account opened with it only in conjunction with a payment order which must be executed within the time limits laid down in the Law on Payments … and must take sufficient measures to ensure that funds received from third parties into the payment account of the customer of the payment institution are not held for longer than is necessary for the payments to be made, otherwise, the funds held in the payment account of the [PSP] are to be regarded as deposits or other repayable funds or electronic money’.
(
14
)	See ECB, Study on the payment attitudes of consumers in the euro area (SPACE 2022), Frankfurt am Main, 2023, https://www.ecb.europa.eu/stats/ecb_surveys/space/html/ecb.spacereport202212~783ffdf46e.en.html; and the document COM(2020) 592 final of 27 September 2020, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on a Retail Payments Strategy for the EU.
(
15
)	This was pointed out by the Commission in A Study on the application and impact of the Directive (EU) 2015/2366 on Payment Services (PSD2), FISMA/2021/OP/0002, https://op.europa.eu/en/publication-detail/-/publication/f6f80336-a3aa-11ed-b508-01aa75ed71a1/language-en.
(
16
)	Document COM(2023) 366 final of 28 June 2023, Proposal for a Directive of the European Parliament and of the Council on payment services and electronic money services in the Internal Market amending Directive 98/26/EC and repealing Directives 2015/2366/EU and 2009/110/EC.
(
17
)	There are now many companies which provide electronic money services. These include Paypal, Apple Pay, Google Pay and Amazon Pay.
(
18
)	Directive of the European Parliament and of the Council of 18 September 2000 on the taking up, pursuit of and prudential supervision of the business of electronic money institutions (OJ 2000 L 275, p. 39).
(
19
)	Recital 7 of Directive 2009/110: ‘It is appropriate to introduce a clear definition of electronic money in order to make it technically neutral. That definition should cover all situations where the payment service provider issues a pre-paid stored value in exchange for funds, which can be used for payment purposes because it is accepted by third persons as a payment.’
(
20
)	Recital 8 of Directive 2009/110: ‘The definition of electronic money should cover electronic money whether it is held on a payment device in the electronic money holder’s possession or stored remotely at a server and managed by the electronic money holder through a specific account for electronic money. That definition should be wide enough to avoid hampering technological innovation and to cover not only all the electronic money products available today in the market but also those products which could be developed in the future.’
(
21
)	Electronic money is broadly defined as an electronic store of monetary value on a technical device which may be used to make payments to entities other than the issuer. The device acts as prepaid bearer instrument which does not necessarily involve bank accounts in transactions. See ECB, Electronic money, https://www.ecb.europa.eu/stats/money_credit_banking/electronic_money/html/index.en.html.
(
22
)	On those interactions, see Riefa, C., ‘Directive 2009/110 on the taking up, pursuit and prudential supervision of the business of electronic money institutions and Directive 2015/2366/EU on the control of electronic payments in the EU’, in Lodder, R. and Murray, A. (eds), EU Regulation of E-Commerce. A Commentary, Elgar Commentaries series, Edward Elgar, London, 2017, pp. 157-160.
(
23
)	The Commission has opted to merge the two directives in the proposal for a new directive set out in the document COM/2023/366 final, cited above in footnote 16.
(
24
)	These are services enabling cash to be placed on a payment account as well as all the operations required for operating a payment account; services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account; execution of payment transactions, including transfers of funds on a payment account with the user’s PSP or with another PSP: (a) execution of direct debits, including one-off direct debits, (b) execution of payment transactions through a payment card or a similar device, (c) execution of transfers, including standing orders.
(
25
)	Directive 2015/2366 does not specifically define ‘operation of a payment account’.
(
26
)	As paragraph 24 of the judgment in Paysera LT observes, Directive 2009/110 does not define the concept of ‘issuance of electronic money’.
(
27
)	The referring court’s uncertainties are understandable, because the difference between payment services and the issuance of electronic money is not obvious in the case of all PSPs. That was emphasised in the Opinion of the European Banking Authority on its technical advice on the review of Directive (EU) 2015/2036 on payment services in the internal market (PSD2), EBA/Op/2022/06, of 23 June 2022, p. 25.
(
28
)	On the definitions of payment services and payment service user, see judgment of 11 April 2019, Mediterranean Shipping Company (Portugal) – Agentes de Navegação (C‑295/18, EU:C:2019:320, paragraphs 37 to 48 and 54).
(
29
)	See Directive 2014/92/EU of the European Parliament and of the Council of 23 July 2014 on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features (OJ 2014 L 257, p. 214). The judgment of 4 October 2018, ING-DiBa Direktbank Austria (C‑191/17, EU:C:2018:809), states that ‘the possibility of making payment transactions to a third party from an account or of benefiting from such transactions carried out by a third party is a defining feature of the concept of “payment account”’ (paragraph 31) and that ‘an account from which such payment transactions cannot be made directly, but for which use of an intermediary account is necessary, cannot therefore be regarded as being a “payment account” within the meaning of the Payment Accounts Directive and, consequently, within the meaning of the Payment Services Directive’ (paragraph 32).
(
30
)	The Commission argued in favour of that view in its reply of 12 March 2012 to question ID 2018/4221 (Ability of a payment account operated by a payment institution to hold a credit balance in readiness for future payment transactions), available in EBA, Single Rulebook Q&A, Question ID 2018,4221, https://www.eba.europa.eu/single-rule-book-qa/-/qna/view/publicId/2018,4221. According to the Commission, ‘… A payment institution may hold clients’ funds on payment accounts for the purpose of providing payment services, including the execution of not yet specified future payment transactions, in accordance with the framework contract for setting up the referred payment account. …’
(
31
)
(
32
)	Article 78(1) of Directive 2015/2366 provides that Member States must ensure that the time of receipt is the time when the payment order is received by the payer’s PSP and that the payer’s account is not to be debited before receipt of the payment order. Under Article 78(2), ‘if the payment service user initiating a payment order and the payment service provider agree that execution of the payment order shall start on a specific day or at the end of a certain period or on the day on which the payer has put funds at the payment service provider’s disposal, the time of receipt for the purposes of Article 83 is deemed to be the agreed day’.
(
33
)	Paragraph 8 of its written observations.
(
34
)	‘Direct debit’ is ‘a payment service for debiting a payer’s payment account, where a payment transaction is initiated by the payee on the basis of the consent given by the payer to the payee, to the payee’s payment service provider or to the payer’s own payment service provider’ (Article 4(23) of Directive 2015/2366).
(
35
)	And will, in that case, be exposed to the liability provided for in Article 89 of Directive 2015/2366.
(
36
)	See the detailed analysis of Storrer, P., Droit de la monnaie électronique, RB Édition, Paris, 2014, p. 41 et seq.
(
37
)	In paragraph 27 of the judgment in Paysera LT, the Court held that ‘redemption’ consists in the conversion of electronic money to its par value and the subsequent payment of funds on the instruction of the electronic money holder. There is no requirement ‘… that those funds are paid into the account of the electronic money holder or to a third-party account’.
(
38
)	Article 11(2) of Directive 2009/110 requires electronic money issuers to redeem, upon request by the electronic money holder, at any moment and at par value, the monetary value of the electronic money held. As the Commission observes, the contract concluded between the issuer and the holder may lay down certain conditions for redemption, including payment of fees, if these are requested within a specified time limit.
(
39
)	The importance of the purpose of the issuance of electronic money may be inferred, a contrario, from Article 18(3) of Directive 2015/2366. The purpose of the transfer of funds is also referred to in the judgment in Paysera LT, in paragraphs 29, 32 and 33, in relation to activities linked to the issuance of electronic money.
(
40
)	EMIs may, in addition to providing electronic money issuance services and managing that type of asset, provide payment services to users by means of payment accounts.
(
41
)	The control by EMIs of sums intended for the issuance of electronic money explains why the own funds requirements are greater for EMIs (Article 5 of Directive 2009/110) than for institutions which act as PSPs. See, in that connection, the judgment in Paysera LT, paragraphs 18 to 22.
(
42
)	Logically, the user has the right to make payments from electronic money.
(
43
)	See, in that connection, the letter of 26 October 2015 sent by the Commission to the Bank of Lithuania (Annex I to the Commission’s observations).
(
44
)	This footnote is not relevant to the English version of this Opinion.
(
45
)	To give an example, PayPal cannot be used to pay an economic operator which does not accept that type of electronic money in its transactions.