Gift cards under the Money Laundering Act: New FINMA practice forces retailers to take action

The sale of gift and prepaid cards has long been an everyday occurrence for kiosks, retailers, and online platforms. However, FINMA's recent clarification of the Money Laundering Act (MLA) is shaking up this seemingly simple business: now, not only issuers, but also distributors of certain gift cards, are subject to the Act. This means that many companies must take urgent action before the end of 2025.

When are gift cards subject to the MLA?

The decisive factor is whether a gift card is considered a means of payment under the MLA. The so-called party relationship is decisive in this regard:

Two-party relationship: The card can only be redeemed with the issuer itself (e.g. Apple, Netflix or Zalando). Such cards are not subject to the AMLA, even if they are sold by third parties.

Three-party relationship: The card can be used with third parties as well as the issuer (e.g. paysafecard, Aplauz). In this case, a payment service is provided, meaning that the AMLA generally applies.

New FINMA practice: Distributors are also considered financial intermediaries.

Until now, the focus has primarily been on the issuers of such prepaid cards in three-party relationships. However, FINMA has now clarified that distributors, i.e. retailers, kiosks, and online shops with direct customer contact, can also be considered financial intermediaries. This particularly applies to retailers who sell prepaid cards in their own name and on their own account.

Alternatively, distributors can act as direct representatives of the issuer. However, in this case, an exception to the AMLA requirement only applies if the strict conditions for the use of auxiliary persons are met. This means that the distributor can only work for one provider and must be contractually bound, as well as being selected, trained and continuously monitored by the issuer.

The deadline is 31 December 2025.

Companies that distribute prepaid cards in a three-party relationship and are not already affiliated with a self-regulatory organisation (SRO) must take action. Those who wish to continue with this business model must submit an application for affiliation to a recognised SRO by 31 December 2025 at the latest. Otherwise, they face fines and regulatory measures.

The tightening of regulations is a response to the well-known potential for abuse of prepaid payment methods, which are regularly used for fraud and money laundering due to their anonymity. Whether the new obligations imposed on distributors will actually lead to effective containment remains to be seen. However, one thing is clear: issuers and distributors must review and adapt their distribution structures in good time to remain legally compliant.