James Browne (Wexford, Fianna Fail) | Oireachtas source

I thank Senator Maria Byrne for raising this important issue. According to the Consumer Protection (Gift Vouchers) Act 2019, the term "gift voucher" means any voucher, coupon, document or instrument, including in electronic form, that is intended to be used as a substitute for money in the payment in whole or in part for goods or services, or otherwise exchanged for goods or services. This legislation, which provides requirements in relation to gift voucher contracts, was brought into Irish law in December 2019 by the then Department of Enterprise, Trade or Employment. Many vouchers or gift cards purchased and used today now meet the definition of "electronic money" and are subject to regulation under the European Communities (Electronic Money) Regulations 2011, as amended, commonly referred to as the EMR.

It should be noted that vouchers that are deemed electronic money within the meaning of the EMR are excluded from the Consumer Protection (Gift Vouchers) Act 2019 on the basis that they are already regulated under the EMR. The electronic money directive, which is the directive which the EMR transposed into legislation in Ireland, is a maximum harmonisation directive, meaning that EU countries may not introduce rules that are stricter than those set in the directive. As per regulation 52 of the EMR, electronic money products have to be redeemable at any time and cannot have an expiry date. This is an important measure introduced to enhance consumer protection. In particular, regulated firms must design and sell products that are suitable to their customers needs and are capable of delivering the promised benefits, with key risks and charges with respect to those products appropriately disclosed. Specifically, regulations 74 to 76 of the European Union Payment Services Regulations 2019, PSR, set out the specific requirements regarding the information that is required to be shared by electronic money institutions with payment service users, including in relation to charges. This means that gift card or voucher providers regulated as electronic money providers must inform users of those vouchers of any charges applied.

I have been informed by the Central Bank that while it does not comment on the supervision of specific firms, its expectation is that all regulated firms, including electronic money institutions, comply with their regulatory obligations. The Central Bank also expects regulated firms to take a customer-focused approach and to act in their customers' best interests at all times. This means that firms providing gift cards or vouchers under the EMR must comply with their regulatory obligations and, in this case, they must ensure that consumers are informed of any charges applicable to the voucher they are purchasing and-or using.

It may be useful to know that as part of the European Commission's retail payments strategy, which was launched in September 2020, the Commission has undertaken to align the revised payment services directive, PSD2, and the electronic money directive frameworks by including the issuance of electronic money as a payment service in PSD2. This will ensure greater consistency in the various legislation on retail payments which would include electronic money vouchers and promote robust supervision and oversight of firms in the relevant sectors. This work will be carried out as part of the review of PSD2, which is expected to begin later this year.

Officials in the Department of Finance will consider the issue of reducing balance fees as part of future discussions on the electronic money directive.