Electronic money is an electronic store of monetary value on a technical device that may be widely used for making payments to entities other than the e-money issuer.
The European Central Bank defines e-money in the following words. “E-money can be defined as amount of money value represented by a claim issued on a prepaid basis, stored in an electronic medium (card or computer) and accepted as a means of payment by undertakings other than the issuer” (ECB).
E money as a monetary value can be stored and transferred electronically through a variety of means – a mobile phone, tablet, contactless card (or smart cards), computer hard drive or servers. Electronic money need not necessarily involve bank accounts in transaction but acts as a prepaid bearer instrument. They are often used to execute small value transactions.
E-money can be stored in hardware a chip card or software usually stored in a server. An access card like credit card or debit card that simply enables us to reach our deposit or to avail a credit doesn’t qualify as e-money.
