Cash Money to E-money

by : seokumar

Cash Money to Electronic Money

Electronic money or better known as e-money is the modern form of money in which all monetary transactions are made electronically. Piles of currency notes are replaced by tiny smart cards, which not only provide us money but provide a lot of services.

Cash vs Electronic Money
Concept of e-money is still young but it's versatility and reliability has made it big hit. Computer has revolutionized human life. Use of internet opened new dimensions in computer use. Today it is being used in every field, in every part of world.

  • E-money ultimately works similar to paper money without the risks and inconvenience, which may occur with cash money.
  • Unlike cash money, it can pass immediately between the two transactions online parties. Smart cards, credit cards, digi cash all of these makes money transfer in no time.

Use of Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) in late 1970s, were among the initial attempts to realize the dream of electronic money. Later use of internet gave an unimaginable boost to the use of computer for monetary transactions.

Today, 90% of total monetary transactions in USA are done through computer based payment system. This fact is enough to prove the increasing popularity of e-money over cash money.

Advances in various technological areas have made the widespread use of electronic cash economically viable, spurring interest in e-money. These advances are:

  • Reliable and fast transaction with a low cost per transaction;
  • Better and user friendly computer technology.
  • Better security system to check fraud and ensure privacy.

E-money has many advantages over traditional cash system, which makes it popular. Some of the benefits of it are as follows.

  • Fast transaction.
  • No need to carry pile of cash, just have your small chip card.
  • Reliable and secure.
  • No fear of theft or robbery.
  • Round the clock banking facility.
  • Better information about your account details.
  • More personalized banking services and instruments.

Disadvantages of Electronic Money
But e-money is not free from loop holes. As all your details are made online, some intruders may get some gaps in security and can give you huge losses. There are number of issues which are required to be resolved completely before seeing e-money swapping traditional cash system completely.
Most important of these are -

  • Issue of data security and threat of fraud.
  • Issue of using e-money in all parts of world especially in underdeveloped countries.
  • Issue of unifying the mode of transaction as incompatible mode of money transfer may cause problems.
  • Issue of cheap e-banking service.
  • Privacy of personal information will also be an important issue.

We can not imagine e-money as complete replacement for the cash money without resolving these issues. These are certain issues which need to be resolved to get total acceptance for e-money.
History of payments systems suggests that new payments methods do not completely replace old ones because the old methods may continue to have valuable and unique features.

Lack of a standard e-banking system in various parts of world is also a big hurdle in complete acceptance of e-money.