What is electronic money?
More and more people use e-payments every day. Some find it as a better option compared to cash, anyway, some stick to the old-fashioned cash method. Of course, both are important. You cannot completely switch to e-money or cash-paying only. I’m sure we all know what “cash” is. So, you might be asking now:
🤷♂️ What is e-money?
Electronic money is broadly defined as an electronic store of monetary value on a technical device that may be widely used for making payments to entities other than the e-money issuer. There are two types of e-money:
💰 Online e-money
💰 Offline e-money
Online means you need to digitally interact with a financial institution to do a transaction with a third party. With the offline option, you can do a transaction without having to directly involve a bank, which is not common. According to the EU, 90,4% (or 12,5 billion) of the money are electronic and are being stored in many servers worldwide. That’s right, 90+ percent.
What are the differences between cash and electronic money?
Cash is still the most common method for using money. Not everybody trusts electronic payments. So, here I have listed some advantages of using cash:
✔ Easy to carry certain amount
✔ No transaction fees
✔ Can pay almost everywhere
But what are the main disadvantages?
🚩 Carrying a limited amount
🚩 Limited record keeping
🚩 Can be lost or stolen
Because of these negative sides, more and more people (including myself) started using the electronic option. E-money provides security. The payments are instant, safe, and hard to hack nowadays. You don’t need to carry certain amounts of cash with yourself and you can easily keep track of how you spend it.
A modern way to manage your finances is by using a digital wallet. Many companies offer such wallets with lots of features and can be used to pay almost everywhere just by your phone.
How I found out the digital wallets?
It was last year, around July. I was selling my PlayStation 4 because I had a summer job and wasn’t planning on using it anymore. I put a post on Facebook Market.
Two days later, a guy messaged me about the console. We decided to meet on the same day at the local park. He came on time but the moment we shook hands he showed a worried face. The guy tapped his pockets and realized he had no cash with himself. He started persuading me to open an account in some shady digital wallet app so I can accept his money there. I didn’t trust him enough so I rejected his option and told him to go to the nearest ATM.
When he came back, we finalized the deal but then I became curious about the online transfer method.
I asked him how does this digital wallet work and what are the advantages of it. Fortunately, he decided to spare a few minutes and explain to me the basics of the app. The application is called iCard. I got impressed by the idea of transferring money easy and instantly, so I decided to give it a try. I passed the verification process easily and on the following day, I was able to use all of the features.
After that, I started carrying less cash on me, because I could pay with my phone. A year passed since then and I’m still happy using iCard’s services.
Cash remains, but are e-money inevitable?
Cash remains the main method for now. It may be costly for banks, but we all use it. It’s inevitable. A cashless society sounds tempting, but should not be pushed too fast and hard, because some countries are still not well developed. Digital systems should be safe and fair. I’m sure we slowly are reaching that goal by developing the digital world.
If you haven’t tried any online payment methods, I recommend giving it a try. You might eventually like it.0