Proposed Germany Prepaid Regulation Causes Controversy

by Mercator Advisory Group 0

A recent plan by German regulators to require all prepaid card sellers to record buyers’ identification has caused wide-spread concerns in the European prepaid industry.

The administrative burden would be too much for the kiosks, gas stations and supermarkets that are the main sellers of such cards, and kill the market, Prepaid Forum Deutschland said in a statement. The group’s members include Paysafecard Group, Lekkerland AG and MasterCard Inc. (MA)

The proposed regulatory change is intended to fight anti-money laundering, but the payments industry has strongly opposed the plan, saying that the change is not necessary and will hard hit the booming market.

If the bill is passed by parliament, Prepaid Forum said Germany would be the only country in Europe to follow such a “radical” path. The requirements would apply to about 40,000 retailers which make about 20 million euros in profit a year selling the cards, according to the group. Money laundering could be combated by other less intrusive and more effective methods, it said.

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