Electronic Money
Electronic Money
DEFINITION of 'Electronic Money'
Electronic money is money which exists only in banking computer systems and is not held in any physical form. In the United States, only a small fraction of the exists in physical form. The need for physical currency has declined as more and more citizens use electronic alternatives to physical currency.
BREAKING DOWN 'Electronic Money'
In the U.S. many people receive their paychecks through direct deposit, move money with electronic fund transfers, and spend money with credit and debit cards. While physical currency still has advantages in certain situations, its role has gradually diminished. While it might seem to be a worrying thought that your bank account balance is nothing but an entry in a computer system, it is really nothing new. Fiat paper currency has no inherent worth either.
Forms of E-Money
E-money, also known as digital money, electronic money and e-currency, is a form of money that is digitally stored as opposed to actual paper or coin currency. The use of e-money typically involves computers, the Internet and wireless transfers. E-money is convenient because it doesn't require the consumer to carry cash and can be used for making purchases and receiving payments any time, 24 hours a day, seven days a week.
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E-money Payment Networks
A payment network can be centralized or decentralized. Examples of a centralized payment network include PayPal and cash-u. These systems act as an e-money intermediary to the bank and allow users to exchange money digitally, which can then be withdrawn and deposited in the bank of the user's choice. Bitcoin and Ripple Monetary Systems are decentralized, meaning they are peer-to-peer as opposed to relying on a central entity to initiate and complete transactions. These systems can be less stable than a centralized system because there are no standards in place to protect the consumer and transactions are typically handled using peer-to-peer software.
Hard Electronic Currency
Hard electronic currency is used for non-reversible transactions, such as those drawn through a bank. The benefit of this type of e-money is the reduced cost of operations. Less paperwork is involved because transactions are non-revisable, except in cases where fraud or illegal use are present.
Soft Electronic Currency
Soft electronic currency, which includes PayPal and credit cards, are reversible. This means users can typically take back a transaction, or cancel the transaction, within a defined period. This period is usually 72 hours.
E-money Delivery Systems
E-money can be stored on your computer, in a centralized location, on a USB card (in code) or a smart money card. Credit cards are a form of digital money. Any of these methods can be used to transfer money to individuals or companies, transfer money from one centralized location to another or make purchases on the spot at a retailer, depending on whether the individual retailer accepts the the type of e-money the consumer presents.
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Identified and Unidentified E-Money
Identified E-money, such as credit card transactions, is a form of e-money that allows the user who withdraws the money to be tracked. It allows banks to track the payment throughout the economy. Unidentified money can be withdrawn from the bank and used like paper money. Once the money is withdrawn from a bank, the bank no longer has the ability to track it. Use of this type of e-money requires a centralized system for exchanging the e-money.
Online and Offline E-transactions
Online e-money transfers and withdrawals require an Internet connection and interaction with a bank in order to conduct a transaction with a third party. An offline transaction, which uses true digital cash, doesn't require involving a bank. This type of e-money is stored on a chip, card or other media and can be used by anyone using the same e-money system.
The advantages of electronic money
Electronic money has brought lots of new opportunities and possibilities. Using digital money is very easy and convenient. With electronic money, people can send mass payments to freelancers, remote workers, and others. It can also be used to pay for utilities, cell phone services, and internet access, transfer money to others, pay for goods and services online and offline, trade and much more. Electronic transactions are carried out almost instantly, while problems such as lines, change, and other are done away with.
Digital cash saves not only time but money as well. All transfers within one payment system are available at a little to no cost. By using electronic money you stay anonymous and you are the only person who has access to your personal data.
Electronic payment systems allow for anonymous payments. All account information is known only to the owner of that account, everyone else sees just a wallet number.
In order to withdraw money or replenish your account balance, you don't have to go anywhere, sign service agreements, present documents, and copies. Deposits and withdrawals come into effect immediately, all this can be done from home.
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The other advantage of digital money is the speed. You can not only exchange your money from any place you want, but such a transaction would be completed much faster. With OKchanger, you can find the exchanger that will suit your needs the most. All you have to do is to log into your account and do what you need to do.
With digital money, you have access to your account from anywhere and at any time. You'll need only internet access to control your funds and perform operations. The number of services that accept electronic money is constantly growing.
OKchanger is a great tool for anyone who wants to exchange their money as fast and convenient as possible. The service displays information about hundreds of exchangers and puts it in a simple and user-friendly way. OKchanger's charts and tables will help you decide what services to use, and user reviews will give you an idea of which services you can trust.