E – Money

E – Money

Shreeya Iyer

 

  1. ADOPTION OF DIGITAL MONEY (E-WALLET) IN THE POST COVID-19 ERA

Wei Q., Et al (2023) states that, paperless money is an emerging trend as businesses are shifting to digital transactions, and it helps in environmental sustainability and sustainable marketing because digital receipts are used as an alternative to paper receipts. This study is significant because it is designed to provide important theoretical as well as practical implications that are related to the role of digital money and e-wallets in impulsive buying for environmentally sustainable business practices in Pakistan. Not only does this study provide an appropriate contribution to the literature with a significant theoretical framework, but it also provides practices for online businesses to develop different strategies for ensuring the best services for the impulsive buying of Pakistani people according to the goals of sustainable business development. E-wallet risk, adopting e-wallets, and impulsive buying. It is critical to understand the risks associated with digital wallets, because it is a hurdle to their adoption as a secure payment gateway. after COVID-19, it has been observed that a digital wallet system is more appropriate for saving money on purchases, as it helps people to buy products and services when they have interacted with advertisements online. There is a moderating role of low distribution charges in the relationship between adopting e-wallets and impulsive buying. There is a moderating role of low transit time in the relationship between adopting e-wallets and impulsive buying.

 

  1. MONEY IN THE REAL AND THE VIRTUAL WORLD: E-MONEY, C-MONEY AND THE DEMAND FOR CB-MONEY

Prinz, A. (1999) states that, imagine a world in which monetary transactions are carried out solely via electronic data exchange. There would no longer be a physical medium of exchange as money, or more precisely as central bank notes and coins (“cb-money”). “Money” would only exist as a virtual medium in form of binary codes on electronic devices. This means that this would actually be a world without money as we know it now. The main object of this paper has been to show how e-money may be integrated into the demand for means of payment. It has been argued that it is useful to consider the demand for monies as derived from the demand for money characteristics, i.e., liquidity and security. Since a dominant money with respect to both characteristics I still does not exist, the addition of a new form of money is desirable. As shown in the paper, whether this new means of payment will be taken into consideration by consumers depends on the technological coefficients concerning the content of characteristics per unit of the money and its price. The cheaper the new money is with respect to the input of resources into its production the higher the chances for becoming an actual substitute for more ordinary means of payment. It can be expected that the input of resources into the production of e-money will not be very high.

 

 

 

  1. FINTECH INNOVATION IN THE FINANCIAL SECTOR: INFLUENCE OF E-MONEY PRODUCTS ON A GROWING ECONOMY

Omodero, C. O. (2021) states that, the FinTech innovation of e-money products in the financial sector has not gained sufficient recognition in Nigeria’s developing country. Despite the numerous economic benefits associated with this innovation, physical cash for financial transactions is still prevalent. Banks are still experiencing some level of cash withdrawals and deposits by individuals who refuse to embrace modem technology. This study stresses the economic benefits of e-payment channels available today and statistically supports evidence to substantiate their usefulness. Financial Technology (Fintech) is a combination of the words ‘financial services and digital technology. Financial technology refers to new technology or innovation that is presently available to aid smooth conduct of financial services. The dependent variable we used in this research as a proxy for the economy is the Gross Domestic Product (GDP). The data on GDP is collected from the CBN Statistical Bulletin. The independent variables are the major e-money products introduced in Nigeria, which include: Automated Teller Machines (ATM), Point-of-Sale (POS) terminals, Web based or internet (WEB) and Mobile Money (МММ). The data on these electronic payment channels are obtained from the various CBN Annual Reports.

 

  1. E-MONEY AND PAYMENT SYSTEM RISKS

McAndrews, J. J. (1999) states that, the rapid development of new electronic systems of payment, or e-money, offers society many potential benefits even as it poses new types of risk for system operators. The risks to which e-money is most subject – operational, fraud, and legal risk – pose new challenges to payment system risk control. For the time being all these systems that transmit payment or payment instructions over open networks will be dubbed “e-money.” Many of these new systems will clear and settle the system’s payments in a special-purpose private bank-a clearinghouse. Issues of settlement risk in clearinghouses are reasonably well understood as a practical matter. All these systems, however, provide services on physically “closed” networks of computers where access is highly restricted. Merchants are carefully screened by their banks prior to being given the ability to accept credit card payments. ATM networks conduct transactions over dedicated phone lines. In addition to the access restrictions, there are several important security aspects, including encryption, that ensure the privacy and accuracy of Fedwire, ACH, credit card, and ATM network messages. An important aspect of e-money is that all three of these systems are likely to be provided by what are called retail “branded networks.” Branded networks consist of a group of providers that use a retail brand identification for marketing purposes and use the central organization for establishing network operating rules, business strategy, and network operations (in the case of e-money, a clearinghouse). The fraud and operational risks associated with the e-money world will require developing solutions to new problems. It is not clear how to protect new systems from fraud.

 

  1. E-MONEY REGULATION FOR CONSUMER PROTECTION

Dehghan, F., & Haghighi, A. (2015) states that, ever since inception about 15,000 years ago, money has been subject to ongoing change – both in its form and modus operandi. Such changes have typically brought about major transformations in the functioning of our economy. Given money’s strategic position in economic activities, it is not surprising to see changes in the monetary process having major repercussions in terms of exchange, production and credit. The other dominant form of paper money, namely, checks backed by demand deposits at banks, remains by far the preferred form of non-cash payment among consumers. Checks have become familiar, widely accepted and fairly convenient after being around for over a century.

The use of e-money could influence the level of costs, benefits and risks faced by consumers in their day-to-day economic transactions. Potential consumer benefits could include the availability of lower costs, faster and more convenient means of payment, as well as increase in the diversity of payment options available to consumers who have diverse preferences and circumstances. This section discusses potential consumer risks in using e-money and the approaches for addressing those risks. When e-money first appeared, the idea was that it might be used as a general means of payment in the real and virtual worlds. It was believed that cash might be replaced by e-purses and that software-based money might freely flow through the Internet to make payments or financial transfers. For some observers, this vision promised to bring about a much more efficient and user-friendly payment system.

 

  1. E-MONEY IN TRANSITIONAL ECONOMIES

Stojanovic, A. (2001) states that, opportunities and threats for Countries in Transition (CIT), and for other developing countries, brought about by the electronic money (e-money) and other electronic retail payments systems developments. The strengths and weaknesses of CIT financial systems, in respect of the new payment technologies, are also assessed. The study looks at retail payment systems and importance of cash in CIT and identifies general business and public policy implications of e-money. It is argued that the new payment instruments, and e-money in particular, can contribute to cash substitution and development of more efficient payment and banking systems practice in CIT and indeed other developing countries, and inspire competition among financial intermediaries.  E-money differs from “access products”, which are products that allow consumers to use electronic means of communication to access otherwise conventional payment services, e.g., use of a PC and Internet to make a credit card payment or to transmit payment instructions. Eventually, learning materials produced using bad instructional design will cost much more than learning materials produced using good instructional design even if the latter learning materials are, initially, costly. The growth of the concept of “disposable e-learning”. If a particular e-learning programme is required, but its content is not expected to have a long shelf-life, it would seem ideally suited to be developed using rapid-authoring tools.

 

  1. E-MONEY PAYMENT: CUSTOMERS’ ADOPTING FACTORS AND THE IMPLICATION FOR OPEN INNOVATION

Widayat, W (2020) states that, in the recent cashless era, the proliferation of mobile technology and the digitalization of financial services have developed significantly, marked by the birth of electronic money as an alternative mode of payment that is seen as part of a new and modern lifestyle. E-money payment, as a meaningful new business model innovation in business and economic life, has attracted great interest from academics and practitioners from multiple perspectives. There are several important points related to the emergence of electronic money as an innovation in the era of economic capitalism with limited capital. The lack of customer willingness to adopt e-money as a medium of payment in transactions is a very interesting social business phenomenon that requires deeper study. Some previous research has addressed the adoption of e-money as a medium for payment. However, previous studies, generally using the technology adoption model, have not used theories in specific contexts.

 

  1. IMPACT OF E-MONEY ON MONEY SUPPLY: ESTIMATION AND POLICY IMPLICATION FOR BANGLADESH.

Nizam, A. M. (2022) states that, with the rapid proliferation of mobile telephony and the establishment of an IT-enabled payment and settlement system, Bangladesh nowadays is experiencing a remarkable growth in the usage of mobile financial services (MFS). As more and more people are opting to use this service, a huge number of mobile accounts are opened every day and a substantial amount of money is deposited, withdrawn and transferred frequently through the mobile network. This ever-increasing amount of mobile money flowing through the network may have a sizeable impact on the overall money supply of the country. Thus far, no systematic study has been conducted to quantify the impact of the mobile money on the conventional money supply of Bangladesh. In this study, we attempt to quantify the contribution of mobile money on the money supply which is an important quantity-based nominal anchor of monetary policy in Bangladesh. Apart from access to mobile telephony, people in some cases of MFS transactions need to subscribe to internet packages in order to unravel the true benefits of MFS. To our surprise, data from Bangladesh Telecommunication Regulatory Commission (BTRC), the telecommunication controlling and bandwidth allocating authority of Bangladesh, unveil that as on January 2021, the total number of mobile internet subscribers reaches an astounding 103.19 million while the number of ISP and PSTN subscribers is next to 9.52 million.

 

  1. FROM ELECTRONIC MONEY TO ELECTRONIC CASH: PAYMENT ON THE NET.

Buck, S. P. (1997) states that, the explosive increase in the use of the Internet has seen the emergence of commercial services and pressures previously restricted to CompuServe and the like. Many predictions see this burgeoning electronic marketplace becoming a significant component of the world economy. However, this can only happen once two key problems have been addressed, namely, protecting property rights and making payments. This has led to a frantic battle for payment mechanisms that can provide the new medium with the means of conducting transactions. The inexorable evolution of money into electronic forms is briefly examined and the alternative types of payment mechanisms proposed, on trial or in use on the Internet, are discussed. The key commercial requirements that successful use of the Internet will impose on a payment mechanism are identified, and these requirements are used to evaluate each of the mechanisms to determine which (if any) are really suitable for electronic commerce. Each of the many payment mechanisms proposed, on trial, or in place on the Internet, can be classified as one of Credit, Debit, Token or Cash. Electronic commerce on the Internet needs payment mechanisms that can cater for as much diversity as commerce in the real world. Large value transactions will require secure ways to use existing debit/credit mechanisms. Low value transactions (micropayments) will require the equivalent of cash. With electronic cash the revolution promised by the heralds of the information economy can be affected, allowing online services to collect micropayments in real-time, with no need to establish the identity of end-users or maintain bills and invoices for them.

 

  1. CRITERIA FOR VALUE-FOR-MONEY E-LEARNING SOLUTIONS

Little, B. (2010) states that, whatever you spend on e-learning tools, platforms or content, it is important – in these days of “lean” operations and doing more with less – that you get value for money. Low-cost solutions used appropriately can yield amazing benefits – but they are a poor investment if they do not help you to meet your learning and/or business objectives. Keep the learning project simple. Just because you are saving money by producing learning materials in-house, do not be tempted to over-extend the project’s remit. Beware of hidden costs. For example, Moodle – an open source LMS – costs little to install and run but users should not forget its associated maintenance costs. Bad (learning) design can cost you as much as – or even more than – good design. Eventually, learning materials produced using bad instructional design will cost much more than learning materials produced using good instructional design even if the latter learning materials are, initially, costly. The growth of the concept of “disposable e-learning”. If a particular e-learning programme is required, but its content is not expected to have a long shelf-life, it would seem ideally suited to be developed using rapid-authoring tools. The growth in popularity and use of open-source software. Opensource software tools seem to be proliferating. These include rapid-authoring tools; open-source webinar software; Alfresco and Joomla, open-source content management systems; SugarCRM, an open-source customer relationship-management system, and Moodle, one of several open-source learning-management systems.

 

 

CONCLUSION:

Electronic money, or e-money, represents a transformative shift in how we conduct financial transactions and manage our finances. Its adoption has been driven by the need for convenience, security, and accessibility in an increasingly digital world. While e-money offers numerous benefits, including faster, more efficient transactions and financial inclusion for underserved populations, it also presents challenges related to security and regulation. The study also highlights that in Nigeria, despite the substantial economic advantages offered by e-money products in the financial sector, they have not received the recognition they deserve in this developing country. The COVID-19 pandemic accelerated the adoption and importance of e-money as a crucial tool for maintaining economic activity and reducing physical contact. E-money, in the form of digital wallets and contactless payments, became a lifeline for businesses and consumers alike during lockdowns and restrictions. E-money introduces both opportunities and risks to the financial landscape. While the security measures of established systems are robust, combating fraud and operational risks in the evolving e-money environment remains a challenge that requires innovative solutions. Additionally, the study reveals the moderating roles of low distribution charges and short transit times in influencing the relationship between adopting e-wallets and impulsive buying, shedding light on the factors that can facilitate or hinder this transactional behaviour.

 

 

 

REFERENCES:

Buck, S. P. (1997). From electronic money to electronic cash: Payment on the net. Logistics Information Management, 10(6), 289-299. Retrieved from https://www.proquest.com/scholarly-journals/electronic-money-cash-payment-on-net/docview/220030373/se-2

 

Dehghan, F., & Haghighi, A. (2015). E-money regulation for consumer protection. International Journal of Law and Management, 57(6), 610-620. doi: https://doi.org/10.1108/IJLMA-06-2014-0042

 

Little, B. (2010). Criteria for value-for-money e-learning solutions. Training & Management Development Methods, 24(5), 637-641,26. Retrieved from https://www.proquest.com/scholarly-journals/criteria-value-money-e-learning-solutions/docview/805018673/se-2

 

McAndrews, J. J. (1999). E-money and payment system risks. Contemporary Economic Policy, 17(3), 348-357. doi: https://doi.org/10.1111/j.1465-7287.1999.tb00687.x

 

Nizam, A. M. (2022). Impact of e-money on money supply: Estimation and policy implication for bangladesh. PLoS One, 17(4) doi: https://doi.org/10.1371/journal.pone.0267595

 

Omodero, C. O. (2021). FINTECH INNOVATION IN THE FINANCIAL SECTOR: INFLUENCE OF E-MONEY PRODUCTS ON A GROWING ECONOMY. Studia Universitatis “Vasile Goldis” Arad.Seria Stiinte Economice., 31(4), 40-53. doi: https://doi.org/10.2478/sues-2021-0018

 

Prinz, A. (1999). Money in the real and the virtual world: E-money, c-money and the demand for cb-money. Netnomics : Economic Research and Electronic Networking, 1(1), 11-35. Retrieved from https://www.proquest.com/scholarly-journals/money-real-virtual-world-e-c-demand-cb/docview/205710866/se-2

 

Stojanovic, A. (2001). E-money in transitional economies. Comparative Economic Studies, 43(1), 101-118. Retrieved from https://www.proquest.com/scholarly-journals/e-money-transitional-economies/docview/204131890/se-2

 

Wei, Q., Xiao, W., Rana Muhammad, S. Y., Irfan, M., Murad, M., & Muhammad, Z. Y. (2023). Adoption of digital money (e-wallet) in the post COVID-19 era: The moderating role of low distribution charges and low transit time in impulsive buying: A developing country perspective. Frontiers in Environmental Science, doi: https://doi.org/10.3389/fenvs.2022.984316

 

Widayat, W., Masudin, I., & Satiti, N. R. (2020). E-money payment: Customers’ adopting factors and the implication for open innovation. Journal of Open Innovation: Technology, Market, and Complexity, 6(3), 57. doi: https://doi.org/10.3390/joitmc6030057

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