What is Electronic Cash?
Electronic cash is generally referred to as money that is exchanged electronically. This digital money can be transferred electronically over the internet, using wireless communications, over private computer networks, and using digital stored value systems. Common uses of electronic cash include direct deposit where your employer deposits your paycheck into your bank account electronically.
Online Banking
Prepaid Credit Card
Prepaid Credit Cards
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Less common uses of electronic cash are prepaid credit cards. These prepaid cards (also called stored value cards) can have a Master Card / Visa logo, but require no credit application or bank account.
Did you know you can go online, send money, and a relative across the country can immediately have access to those funds using a prepaid credit card? Find out more about prepaid credit cards and other electronic cash products below.
What is Electronic Cash?
Electronic Cash is any financial instrument that uses electronic means to buy goods and services. These financial instruments either use stored value to represent an amount of money that is not tied to a particular bank account or they are digital transactions that represent money when transferred between two financial institutions. Below you will find the definitions of different types of Electronic Cash products.
Prepaid Credit Card
A prepaid credit card is a reloadable debit card with the Mastercard / Visa logo. A prepaid credit card is not tied to a bank account. Technically a prepaid debit card is a stored value card because the money is stored digitally on the card. Transit payment cards used for tolls and subways basically use the same stored value technology. A prepaid credit card is different in that it carries the Mastercard or Visa logo. With the Mastercard / Visa logo you can shop-anywhere, online or your local store, just like when using a credit card. A prepaid credit card also acts as an ATM card enabling cash back at ATM machines and most major retail stores that accept pin debit card transactions (see debit and credit card definition below).
Electronic Funds Transfer (EFT)
Most people are familiar with electronic funds transfer. They include:
- Credit Card / Debit Card Transactions. This is where a card holder makes use of a payment card to make a payment electronically. Uses: Churches Moving to Electronic Giving | Securing Credit Card Transactions.
- Direct Deposit / Electronic Benefit Transfer. This is where a business, Government agency, financial institution, or payroll services company directly deposits a paycheck or benefit check into an person’s bank account. Direct deposits can also go on a prepaid debit card. See Direct Deposit Cards – Alternative to Check Cashing for more info.
- Direct Debit Payments. This is where a business with the customer’s permission does a direct debit out of a customer’s bank account. This is normally done as part of a recurring subscription or a one-time payment instead of using a credit card. A direct debit payment is also referred to as an electronic check.
- Electronic Bill Payment. This is the electronic bill payment in online banking, which may be delivered by EFT or paper check. ,b>Uses. Business-To-Business (B2B) Electronic Payment Trends.
- Wire Transfer. Wire transfer via an international banking network. This is a direct bank-to-bank transfer and usually needs to be initiated manually (generally carries a higher fee).
International Money Transfer, Transferring money overseas offers its own set of challenges. Find out more about options for International money transfer. Trends. Money Order Processing is a Dying Business.
With the advent of online banking, there are now more options for electronic funds transfer as well as other banking services. See postings on Online Banking: Banks Go Online To Become Relevant Again, Online Banking Phishing.
eWallet
An eWallet is an electronic stored value account where an user can use the account to shop online, receive money, and to send money. These personal financial accounts are usually provided by a retailer, a payment processor, or other financial services company. More sophisticated eWallets have many of the same services of a bank to include being associated with a MasterCard / Visa logo for shopping online at millions of stores. eWallets are generally used to buy, sell and transfer money between individuals and businesses. PayPal is an example of an eWallet. eWallets can be used using a PC over the internet.
Some retailers such as cell phone service providers as well as some financial services companies offer mobile phone banking. Many people in developing countries who do not have bank accounts use mobile phone banking with electronic stored value accounts (eWallets) to send and receive money as well as make payments from their cell phone.
ATM, Debit and Credit Cards
A debit card is basically an automated Teller Machine (ATM) card. A debit card is tied to a bank account and it has no line of credit as with a credit card. You normally use a debit card with a Personal Identification Number (PIN). A debit card can be used to withdrawal money from a ATM or shop at off-line retail stores accepting a debit card logo. The Maestro or Circus logo are examples of ATM logos that enable card holders to shop at millions of retailers worldwide. For debit card transactions, the user must use a PIN and then the money is immediately debited from card holder’s account. Many times a debit card can be used as a credit card if it has the Mastercard or Visa logo. In these cases the money would not be debited from a user’s account for 1-4 business days because the financial transaction is using the Automatic Clearing House (ACH) just like traditional credit cards. Generally, a ATM card cannot be used to purchase on the Internet unless it has the MasterCard or Visa logo. Credit cards are also payment cards like debit cards, but they include a line of credit and can be used to shop online or at local retail stores. Most credit cards have the Visa/Mastercard logo. Uses: Contactless Credit Cards
Global eCurrency
Many banks and financial institutions are not meeting the needs of individuals and businesses that are buying, selling, and transferring money Internationally. Many International financial transactions can take days if not weeks to complete a transaction. Now with the Internet where buying and selling happens with the click of a button, there is a definite need for a global currency. There are several International companies that are now fulfilling the need for a global currency by offering private eCurrency backed by gold. By using the gold standard there is no need to convert currency and conduct money transfers between bank accounts. eCurrency transactions can happen in seconds. In most cases you can open up an eCurrency account for free. Depending on the financial services company, there are many ways to add eCurrency to your account and to transfer the eCurrency to your local financial institution and local currency.
