The e-wallet is a payment account from which the customer pays. A consumer purchases e-money from a business to enable him to make money transfers or purchase goods or services from participating individuals and merchants which accept such e-money.

Often, the entity operating the e-wallet also issues the e-money. However, there is also a possibility that the e-wallet is provided by an entity that is separate from the issuer of the e-money.

The service provider that provides and maintains this e-wallet performs an account issuance service, which poses all four key risks and concerns that need to be addressed:

• Money laundering/terrorism financing (MT/FT) risks
• Technology risk
• User protection; and
• Interoperability concerns.

The activity of e-money issuance however only carries user protection risks. The Payment Services Act (PS Act) obliges major payment institutions (MPIs) that issue e-money to safeguard customer money from their own insolvency.