Electronic money: types of digital money, advantages and disadvantages of Internet money

The popularity of this type of money (digital payment systems) has grown significantly in recent years. This is due to various factors that affect consumers, businesses and the financial system as a whole. Today we will look at this topic, understand what web money is, its disadvantages and advantages, which electronic wallets exist.

What is electronic money?

It is a type of digital currency that exists as an electronic record on a computer or smartphone. It can be used for many types of online or other electronic communication transactions. This form of payment is used in various areas, starting from online stores and ending with gaming platforms such as Bettilt Casino.

Electronic money is a form of digital funds that can be used for electronic transactions and online payments. However, there are differences and features compared to other financial instruments. The following objects are not considered electronic money:

cards with discounts from sellers;

gift certificates;

gas station cards (fuel cards);

tickets for city transport;

telephone credit cards, etc., which are only accepted as a means of payment by their graduates.

Types of electronic money

Classification:

National (expressed in the official currency and included in the state payment system).

Private currency units (electronic money includes financial units that belong to non-state segments and have internal regulation).

It is important to note that the state does not guarantee the reliability or liquidity of private money.

Types of electronic money:

Electronic wallets are among the most widely used types of electronic money (E-Wallets). They enable owners to keep money in electronic accounts and make payments online. The three most well-known electronic wallets are Perfect Money, AdvCash, and Payeer.
Users can utilize their mobile phones to conduct purchases thanks to mobile payments. Apple Pay, Google Pay, Samsung Pay, and other popular mobile electronic money systems are examples of this.

Cryptocurrencies such as Bitcoin, Ethereum, Litecoin are examples of electronic money based on blockchain technology. With them, you can carry out anonymous and secure operations.

These different types of electronic money have their own characteristics and properties, and the choice of a particular type may depend on the needs and preferences of the user, as well as technical, security and regulatory aspects.

Peculiarities of electronic money payments

Electronic money and the forms of its use are not a complex issue, the principle of their operation is mostly simple and allows various enterprises and companies to perform a dual role:

they can act as merchants, receiving electronic money in exchange for their offers;

or as users, paying for their purchases with this money.

For this, the company, which is a legal entity, concludes an agreement with a bank (issuer or settlement agent) and opens two accounts (wallets): one for receiving, the other for settlements as a user.

In order to make a payment, it is necessary to purchase the payment means of the system for real money, which are then credited to the person’s wallet and can be used by the user.

Replenishment can take place:

through branches of banks cooperating with the system;

through payment cards;

through current accounts;

through payment terminals.

After receiving, the user can convert them into cash or transfer them to a bank card.ʼ

Advantages and disadvantages of electronic money

The advantages include the following:

• Convenience and speed of payments
• Ease of conducting financial transactions
• Effective use for online shopping
• Ability to track and analyze costs
• Saving time on money transactions
• Reduction of costs for printing money and working capital
• Reducing the risk of losing money due to theft

The following are among the disadvantages of electronic money:

• Risk of cybercrime and fraud
• Dependence on internet connection
• There is a possibility of technical failures
• Lack of anonymity in some cases
• Inaccessibility for those who do not use technology
• The possibility of losing access to funds in case of technical problems
• Restrictions on use in some geographic areas.

In a broad context, digital money is a means that reflects the current trend in the development of financial technologies, which is aimed at improving and accelerating transactions. By providing convenience and accessibility, this form of money influences the way people manage their finances and interact in the global economic environment.