Electronic money or better known as electronic money is the modern form of money in which all monetary transactions are carried out electronically.
The piles of banknotes are replaced by tiny chip cards, which not only provide us with money, but also many services.
The concept of electronic money is too young, but its versatility and reliability have made it a great success.
The computer has revolutionized human life. The use of the Internet has opened up new dimensions in the use of computers. Today, it is used in all fields, in all regions of the world.
Electronic money ultimately works the same as paper money without the risks and inconveniences that can arise with cash.
Unlike cash, it can pass immediately between two sides of online transactions. Chip cards, credit cards, digi cash, it all makes it possible to transfer money in no time.
The use of Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) in the late 1970s was one of the first attempts to realize the dream of electronic money. The subsequent use of the Internet gave an unimaginable boost to the use of computers for monetary transactions.
Today, 90% of total monetary transactions in the United States are carried out through a computerized payment system, which is enough to prove the growing popularity of electronic money over cash.
Advances in various technological fields have made the widespread use of electronic money economically viable, stimulating interest in electronic money. These advances are:
o Reliable and fast transaction with a low cost per transaction;
o Improved and user-friendly computer technology.
o Better security system to check fraud and guarantee confidentiality.
Electronic money has many advantages over the traditional payment system, which makes it popular.
Some of its advantages are as follows.
o Fast transaction.
o No need to carry around piles of cash, all you need is your little smart card.
o Reliable and secure.
o No fear of theft or robbery.
o 24 hour banking facility.
o Better information about your account details.
o More personalized banking services and instruments.
But electronic money is not free from loop holes. As all of your details are created online, some intruders may have security holes and can cause you huge losses.
There are a number of issues that need to be addressed completely before you see e-money fully trading the traditional payment system.
The most important of these are –
o Data security issue and threat of fraud.
o Problem of use of electronic money in all regions of the world, especially in underdeveloped countries.
o The question of unifying the mode of transaction as an incompatible mode of money transfer can be problematic.
o Problem of cheap e-banking service.
o The confidentiality of personal information will also be an important issue.
We cannot imagine e-money as a complete replacement for cash without addressing these issues. These are some of the issues that need to be addressed to achieve full acceptance of electronic money.
The history of payment systems suggests that new payment methods do not completely replace old ones, as old methods can continue to have valuable and unique characteristics.
The lack of a standard electronic banking system in various parts of the world is also a major obstacle to the full acceptance of electronic money.
If you have something to discuss about e-money or if you want to ask a question about it, please don’t hesitate to contact me.
Source by Seokumar Kumar