16 Dec Five benefits of using electronic money
As we announced, Italy promotes the use of card payments as a measure to reduce tax evasion in the country. However, this is only one of the five benefits of using electronic money. Cash, although still leading, is gradually losing ground as a preferred payment system for users.
What is electronic money?
According to the European Central Bank, electronic money is a monetary value that is used for Internet transactions. It is an electronic substitute for coins we know. In addition, this type of money is characterized by being stored in electronic media. There are some entities authorized to issue electronic money, called Electronic Money Institution (EMI), which have an obligation to issue it at face value and this must be accepted as a means of payment by companies other than the issuer. Leaving aside the debate about whether cryptocurrencies such as bitcoin (decentralized virtual currencies) are considered electronic money or not, it should be noted that it is a very broad concept that encompasses any payment system that involves an electronic medium. Thus, depending on the support used, one can distinguish between the money attached to the card and the software money. The first is related to payment methods based on a card that generally tends to be a rechargeable prepaid card. Example: Bitsa Card, where the money is deposited in one of the authorized EMIs in Spain and other European countries. Discover the advantages of a prepaid card without a bank account. The second type, electronic money stored under a software format allows transactions to be carried out without requiring additional software or hardware. Ex: wallets.
Benefits of using electronic money
The five benefits of using electronic money in your day-to-day life are briefly summarized below.
- Security Top-ups or deposits made by the user are guaranteed because electronic money is backed by a trust: The companies responsible for managing electronic money are subject to the control and supervision of the relevant institutions. In addition to this, electronic money is safer because it is not possible to lose it, receive counterfeit money or erroneous amounts, as is the case with cash.
- Without banks in between Users maintain the privacy of their data (balances or movements they make). The movements are in the private network of VISA and Mastercard.
- Speed Exchanging electronic money is a simple and instant process. You save time and gain security.
- Less costs As it is not associated with traditional banking institutions, there are no operating expenses, nor maintenance costs for having your money in good standing.
- Traceability Especially important in the business field since electronic money facilitates compliance with the requirements of corporate transparency for possible audits.