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Electronic Money and Non Cash Payment Methods

Over time, e-banking software technology has advanced a lot. An example of this is a new mode of payment: electronic money. Digital cash stored on an electronic device or at a server is known as electronic or e-money. E-money is part of E-wallet service. The E-wallet service includes an E-wallet or purse used to store relatively small amounts of money. Additionally, using this service, people can access e-money through smart phones or an internet payment account.

Differentiating e-money from other forms of non-cash payment methods

Often, people confuse e-money with other forms of non-cash payment methods: This is a mistake that you must not make. Unlike other forms of non-cash payment methods, you can use e-money for multipurpose payments. The purpose of other non-cash payment methods with co-branded prepaid cards is to provide you access to traditional payment modes through electronic mediums. E-money does not do that. Instead, it substitutes cash.

E-money and cash many attributes. However, to use e-money, you must purchase the digital equivalent of notes and coins. In a lot of ways, e-money is similar to debit or credit card. However, there is one major difference: unlike debit or credit card, electronic money does not need any third party authorization.

Using and issuing electronic-money

Making payments with electronic money does not require any authorization. However, when issuing e-money, some guidelines need to be followed. E-money institutions are authorized to issue electronic money. However, they must ensure that electronic money on co-branded credit cards is electronically stored, accepted as a means of payment by a person other than the issuer, and issued on funds receipts for making payments transactions.

Final Word!

You must always keep in mind that e-money is not cash. Regulating e-money is not the responsibility of the central bank in some countries. Instead, this responsibility falls on a private company. Basically, individual companies are not a central authority issue e-money. Bitcoin is an example of e-money: you can buy and trade it like any other currency using online banking software.

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Take Home Message

E-wallet service is the future of money: this is something you must accept and embrace wholeheartedly if you want to taste success in the future and gain e-wallet license.

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