Electronic money gives flexibility to the owner because it is paperless and can be transferred around with the use of technology such as internet. It works through the use of a “public and private key” system, which allows user to access his or her account through the use of a security pin code. Generally, electronic money is also identified by the terms e-money, digital cash, digital currency or electronic cash.
The history of electronic money can be traced back to 1860, when the Western Union introduced the electronic fund transfer (EFT). This marked the beginning of electronic money. 1918 leaves another mark in the history of electronic money when the Federal Reserve of America transferred currency via telegraph. As computer technology developed and was adapted by banks, there was a heavier reliance on computer technology to record customer’s details. Since then, various systems were developed to maintain a detailed record of a person’s financial condition and credit status. The availability of these details enables electronic money to work, because data is easily accessible and maintained.
Electronic money allows faster monetary transaction, minus the hassle produced by cash transaction. There needs to be a consensus on both the bank and account holder in order to produce successful electronic money transaction. During the late 1990s, better technologies related to electronic money were created. Examples include electronic checks and embedded smart cards. These are means for transferring money.
During the 19th century, bank notes were an important form of money. The emergence of internet enabled online purchase. Since then, electronic money transactions became more common. The ownership of electronic money account allows purchase of items through internet. Direct deposit and electronic fund transfers changed the lifestyle of many and was given credit due to its convenience.
The history of electronic money is fairly new and has a long way to go. It is too soon to tell whether this technology will sustain the interest of public and succeed, or fail to rise to the expectations of the public. However, it is safe to say that electronic money will continue to bring forth changes in the banking industry as well as in consumer purchase behavior.
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