Newsletter 1058: FINMA Interpretive Practice: Distribution of Prepaid Cards – SRO Requirement by End of 2025

Dear Sir or Madam
Esteemed Members

FINMA has clarified its interpretative practice regarding the distribution of prepaid cards. It is now explicitly stated that providers of prepaid cards operating under a three-party model fall under the Anti-Money Laundering Act (AMLA) and must join a self-regulatory organization (SRO) by no later than 31 December 2025.

1. Legal basis
According to Art. 2 para. 3 lit. b AMLA, financial intermediaries also include persons who professionally accept, hold, or assist in the investment or transfer of third-party assets – in particular those providing payment services, such as processing electronic transfers for third parties or issuing or managing means of payment such as credit cards or prepaid cards.

Under Art. 4 para. 1 lit. c AMLO, such a service exists when the financial intermediary issues or manages non-cash means of payment and thereby enables payments to third parties. Accordingly, systems that allow the transfer of assets between third parties are generally subject to the AMLA.

2. Who is subject – and who is not?
Not subject (two-party model)

• Prepaid cards that can only be used with the issuer are not subject to the AMLA.
  Examples: Apple, Netflix, Zalando, PlayStation, etc.
• Third parties who only sell such cards are also not subject, as long as the cards can be redeemed exclusively with the issuer.
  (cf. FINMA Circular 2011/1, margin nos. 64 ff.)

Subject (three-party model)

• Prepaid cards that can also be used with third parties (e.g., paysafecard, Aplauz) qualify as means of payment within the meaning of the AMLA.
• Both the issuer and the distributors (sellers with direct customer contact) are generally subject to the AMLA.
• This applies to both models:
     o   Sales model (own name, own account): always subject
     o   Agency model (in the name of the issuer): subject, with the possibility of the auxiliary person exemption under Art. 2 para. 2 lit. b AMLO, provided the conditions are permanently met.
  (cf. FINMA Circular 2011/1, margin no. 67; BSK AMLA – BACHELARD/HESS, Art. 2 para. 3 lit. b no. 47)

Conclusion: FINMA has clarified that providers and sellers of prepaid cards operating under a three-party model qualify as financial intermediaries under the AMLA. They must therefore join an SRO or demonstrate that they fall under the auxiliary person exemption.

3. Responsibility of members
Our members are responsible for ensuring that all third parties or distribution partners who distribute prepaid cards on their behalf fulfil the legal requirements.

• Affected distributors must submit an application for SRO membership no later than 31 December 2025. All forms and information for the application process are available on our website at https://www.vqf.ch/en/vqf-downloads.
• Anyone uncertain as to whether they are subject to the AMLA should contact us immediately to assess the situation and any possible exemptions.

Kind regards
VQF - Financial Services Standards Association