Electronic Money Supervisory Commission

e-Money Evolution

e-Money Evolution

  • Evolution of money from notes and coins and its many uses have a come a long way since its creation. Not only physical aspects of the notes and coins have changed. Money today is not only used as a medium of exchange but a unit of account and a store of value. The use of notes and coins has help transformed lives of people and the way in which they interact with each other.

    However, the inbuilt nature of evolution pushed the use of money to its limit and people started wanting a more secure and easily transportable form of money. The use of banks has, to a large part, fulfilled this requirement.
    It is in this backdrop in the mid ’90s that we saw the wide use of computers taking root. From the beginning many visionary thinkers recognized the potential of computer and the significance it would place on human beings. The integration of computers into banks was inevitable and with this integration, we see a new form of money taking shape – electronic money.

    It wouldn’t be an overstatement to say that the world we live in today is completely entrenched in electronic based systems. From the alarm clock that wakes us, to the vehicles that transport us to and from work or school, to the tools we use at work or school, all have an electronic element. Our means of communication have also been transformed and distance is no longer a barrier to communication.
    In this ever-evolving electronic world, in the recent past we have seen a paradigm shift in the age-old exchange of goods. The demands placed by organizations, governments and individuals for faster safer methods of completing transactions have combined the banks along with electronic devices that are used daily to spawn a whole new way of interaction.

    An electronic transaction (e-transactions) is the sale or purchase of goods or services, whether between businesses, individuals, governments, and other public or private organizations, conducted over computer-mediated networks. The goods and services are ordered over those networks, but the payment and the ultimate delivery of the good or service may be conducted on or offline. In this context banks to a large part today play the role of a facilitator for the interaction.

    The growth of e-transactions is so widespread today, it dwarfs notes and coins. For example, in the UK, of all the money that is in circulation, only 3% is in the form of notes and coins and the balance 97% is e-money.

    E-commerce consists of the buying and selling of products or services over electronic systems such as the internet and other computer networks. The amount of trade conducted electronically has grown dramatically since the introduction of the internet.

    A wide variety of commerce is conducted in this way, including things such as electronic funds transfer, supply chain management, e-marketing, online marketing, online transaction processing, electronic data interchange, automated inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the web in at least some point in the transaction’s lifecycle.,

  • A wide variety of commerce is conducted in this way, including things such as electronic funds transfer, supply chain management, e-marketing, online marketing, online transaction processing, electronic data interchange, automated inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the web in at least some point in the transaction’s lifecycle.

    Products less suitable for e-commerce include products that have a low value-to-weight ratio, products that have a smell, taste, or touch component, products that need trial fittings – most notably clothing – and products where colour integrity appears important. Nonetheless, clothing sold through the internet is a big business in the US.

    Another development would be the use of NFC (Near Field Communication) in doing transactions, like in more developed regions in the world where people use their NFC cards which are linked to bank accounts to make payments on the move. No more signing slips or waiting in line, you just ‘tap and go’.

    E-transactions are bound to grow by leaps and bounds in the near future as the avenues for its use open up, and as it becomes more accessible to the masses, there may be a day the only place you would be able to see physical notes and coins would be in a museum or a coin collector’s vault.

    Today, usage of digital currency is wide spreading all over the world. Different companies developed high tech systems, top of the notch securities, public ledgers and real-time crypto exchanges. People are starting to accept these digital currencies as real money of values. Some cryptocurrencies has even more value than the traditional money, using it for buying things online,

    food deliveries, airfare and even making payments. Electronic money has been in par with paper bills and people’s day to day living. Furthermore, this new era of paperless society will not seize to stop at any moment nevertheless the world will see to experience the fast-paced change of today’s digital currency.