What is Electronic Money, its advantages and use-cases?

In the most basic terms, electronic money is a digital representation of stored value in a system. E-money can be used to exchange value between parties, except nothing changes hands, just electronic records being updated. 

Products that store this predefined value or payment information can be either hardware- or software-based. 

Any of your traditional debit or credit card is the key to your e-money. The financial information, nowadays, is stored in both the chip and the magnetic stripe. When using this type of payment, you give remote access to your money by swiping the card in card readers. The point-of-sale terminal connects in real-time to a server to verify, update and close a transaction. Sometimes, like when shopping on board a flight, it is also possible to make a payment even with no connection and it is finalized later.

Your online banking stores your money in electronic form – it is kept in electronic records on a server. Prepaid cards issuers, digital wallets and other financial companies usually accept deposits of fiat currency and in exchange give you electronic means of funds transfer.

iCard is an electronic money institution and is regulated by the same body that licenses banks, however, there’s a major difference.

What is an e-money institution?

In simple terms, an e-money company, like iCard, is licensed to issue electronic money and can deliver a complete solution for money transfer and management.

We give you better money protection for a few reasons:

• Your money is kept at regulated banks – in special or segregated accounts. 
• Your money is not at risk.
• Your money is not guaranteed by a deposit scheme or insured – it’s required by law to be there on demand.
• Your money is separate from iCard’s money and no creditor of ours can demand it in case of financial issues.

iCard, just like banks, is applied with the same requirements for systems, processes and safety. Banks insure 100,000 Euros, while we protect ALL the money of our clients.

Who uses e-money?

According to the European Union website, only about 9.6% of the money supply is cash. That means that approximately 90.4% all Euro currency is electronic and it usually resides in an electronic account on a server somewhere in the world.

E-money is widely accepted and exchanged mostly due to the fact of convenience compared to cash. 

A lot of people who prefer cash payments, but get salaries paid to their bank account, actually also use electronic money and exchange it on demand for physical bills (usually at ATMs).

Cash can take criticism as some people claim that it is mostly used for illegal purposes like money laundering. This opinion is biased, because money laundering also happens with E-money when no control is exercised within banks (intentionally or unintentionally).

Why should I use e-money instead of cash?

Paper money has its advantages in certain situations, but its use has been diminishing with time and as the technology is becoming more accessible. 

Consumer are free to pay however they want, but e-money is slowly taking up a larger share of Point-of-Sale transactions. 

Some regions have already switched to doing the majority of retail payments with contactless debit cards. 

This is due to a few factors:

• E-money drastically reduces the overall cost of operations compared to paper money
• Paper-less money is more environmentally friendly – it does not need paper and that means no trees being cut down (or cotton or other fibers)
• The technology is not brand new, thus it’s reliable and risks are usually controlled well
• Most jurisdictions have passed legal frameworks to regulate the use of e-money and prevent money laundering and other unethical uses
• Banks usually run under a regulated insurance scheme or a guaranteed fund that protects deposits up to a certain amount
• E-money institutions, like iCard, also protect user money, but unlike banks, we keep it in separate segregated accounts.
• Electronic money is perfect for e-commerce transactions and enables end consumers to shop conveniently online for goods and services. This makes sense because cash cannot be handled from а distance. 

OK, I like this! How do I start?

iCard gives you top-notch user experience and a super convenient way to pay and get paid with electronic money!

Here is what you get from a Standard account in iCard:

• Enjoy 0.00 Euro monthly fees – always
• Pay contactless with your Android phone
• Get 1 wallet with multiple currency accounts
• Store ALL your barcoded discount cards
• Send eGiftCards instantly at the last moment
• Be protected with Virtual Cards (get 2 for free)
• Use 50,000 Euro maximum account balance
• Freeze and Unfreeze cards when needed
• Top-up prepaid phones from your Digital Wallet
• Chat with contacts via iCard Messenger
• Send money Free & Instantly to contacts on iCard

And this is how easy it is to start:

• Install the mobile app on either Android or iPhone and try it out with a Starter plan
• Get fully verified with a Standard account by showing your ID in a 2-5 min video chat in the app
• Get a Free iCard Visa debit card sent to you by post
• Never visit a branch to control your money
• Accept and make in-person payments with a QR Code
• Fund your account with a stored debit card (Instant after the card is verified)
• Fund your account with bank transfers
• Fund your account with salary payments
• Fund your account with Trustly (usually instant)
• Send bank transfers to IBAN accounts from your phone

Some of our services have transparent usage fees but prepare to get nicely surprised.

By choosing iCard for your daily money management, you choose a fully-licensed e-money provider that delivers services to clients within the European Economic Area. For 12 years, we’ve served over 500,000 clients in 30+ countries.

Download iCard today!