The Various Forms of E-Money


E-money is nothing but a form of money that is digitally stored when juxtaposed to actual paper or coin currency and popularly termed as digital money, electronic money, or e-currency.

The convenience aspect of e-money is one that lures all customers as you are negating the hassle of carrying cash, and the ease of deploying this 24 hours a day makes it an absolute charm. At the same time, there are diverse forms that exist and let us dig into these nuances.

E-money Payment Networks

A payment network has two variants a centralized payment network like PayPal and decentralized payment networks like Bitcoin.

The centralized system acts as a middleman between the bank and customer, aiding the exchange of money digitally; at the same time, there is a dearth of dependence on a central entity for initiation or completion of a transaction.

However, the stability of a decentralized system can be perturbing because of the lack of standards in place to safeguard the consumer and transactions.

Payment Networks

Hard Electronic Currency

This currency is deployed for non-reversible transactions, for instance, like the transactions drawn through the bank. The advantage here is there is a significant reduction in terms of cost of operations.

Another added incentive is the limited paper works involved because of the nature of transactions that are non-revisable.

 Soft Electronic Currency

This currency involves reversible transactions through platforms like PayPal and credit cards. Here the customer can cancel the transaction within a definite period, and this is usually fixed as 72 hours.


 E-Money Delivery Systems

This form of money can be stored on your computer, a USB card, a centralized location, and a smart money card. A form of digital money includes credit cards. For transferring money to individuals or customers, any one of these methods can be deployed.

Whether the process entails transferring cash from one centralized location or purchases on the spot, according to the payment method accepted by the individual retailer.


Identified and Unidentified E-Money

Credit card transactions are a form of identified e-money that presents the user with the chance of being tracked on utilising this method. This confers banks a superior position throughout the global economy.

At the same time, that money that can be withdrawn from the bank and deployed like paper money is unidentified money.

This means once the withdrawal happens from the bank, the bank cannot track where the money is being utilised. This system, however, entails a centralized system for exchanging e-money.

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