EMoney

Electronic money, or emoney, refers to electronically stored monetary value that can be used to make payments or transfer funds. It is issued by an electronic money institution or payment service provider and stored on a device, card, or in an online account. The value represents a claim on the issuer rather than a traditional bank deposit, and it can typically be spent up to the balance held by the holder.

EMIs issue a variety of instruments, including prepaid cards, digital wallets, and mobile money accounts. Users load funds onto the instrument, which can then be used for online purchases, point-of-sale payments, or person-to-person transfers. Some systems support near-field payments and cross-border transfers, with availability shaped by local regulation and network participation.

Regulation and supervision of emoney aim to protect consumers and maintain financial stability. Providers often must obtain licenses, safeguard funds, and meet consumer protection standards. Customer funds are frequently kept in segregated accounts, and anti-money-laundering and know-your-customer rules apply. EMIs are generally distinguished from banks and from cryptocurrencies, although they operate within broader payments regulation and may evolve as policy contexts change.

Historically, emoney developed from stored-value and prepaid instruments and expanded with online commerce and mobile networks. The rise of digital wallets and mobile money services has accelerated cashless payments, improved access to payments for some populations, and facilitated smaller, faster transactions.

Advantages of emoney include convenience, speed, and lower costs for many payments, especially online and cross-border transfers. Risks involve issuer insolvency, cybersecurity threats, and privacy concerns, with the level of protection largely dependent on regulatory frameworks and disclosures by providers.

Related concepts include digital wallets, payment service providers, and central bank digital currencies.