There are few stores and companies on the market that, despite the lack of payment terminals, maintain their profits at the same level as more progressive competition. The problem occurs when the customer has no cash and only has a payment card or other means of payment. ATMs are not available everywhere and we cannot withdraw money from everyone, so we’ll be looking for a store with a terminal sooner than asking pedestrians about the nearest ATM. These are the charms of payment cards that have taken over the hearts and wallets of Poles. We don’t want to carry banknotes and heavy coins in them anymore – we definitely prefer card payments or smartphones connected to them. With them came the era of non-cash money. What should we know about her? Will electronic money completely ban cash payments? Let’s see.
Electronic money – definition
The term electronic money can be understood as a financial resource found on a prepaid card or more and more often a mobile device. It allows you to make payments without having to involve cash or even bank accounts in this process. It is not surprising that such a solution has quickly become very popular, because it responds to the needs of consumers and changes in the modern financial market.
Electronic money must meet several conditions in order to be in line with EU and Polish legislation. What sets it apart from cash is the storage of information on electronic media. It seems to be available to the client under the contract – this is done on the basis of exchange for cash of the same value. It functions as a payment method, and if the consumer wishes, electronic money is exchanged for cash. Their value is expressed in monetary units. So since it is not much different from “physical” money, it looks like it wins with more comfort of use. Payments are faster, we don’t have to open a wallet with cash when standing at the checkout. There is also no need to change money or, at the request of the operator, look for smaller coins. We will pay exactly as much as the bill, or as much as we want, for example, if we are in a restaurant and include the tip for the waiter in the amount to be paid.
Electronic money – types
Electronic money can take two forms. In the first case, it occurs in the form of an electronic purse that uses processor card technology. It is in a way a supplement to the range of payment cards we use every day. The purpose of this purse is to handle retail payments of relatively low amounts (e.g. bills in shopping malls). The second type of electronic money is online money. He uses software that allows users to make remote payments. Like its predecessor, it also applies to retail sales for small amounts.
The indicated types of non-cash money differ in several important issues. Let’s start with the fact that the electronic purse can save financial values in the processor’s memory (built into the card). In turn, computer money is stored in network money. Whichever option you choose, we will meet the obligation to pay in advance. In practice, this means that only when we deposit, using “ordinary” money, the given amount, we will be able to continue to dispose of it. How much we decide to pay is saved on a chip or computer and does not have to be associated with any physical storage medium or bank account.
Cashless money – how to use it?
Poles love shopping online and are doing more and more of them. Can we pay for them with electronic money? By all means, but remember that we must then use a special prepaid card instead of the payment card to which we are used to.
Do you remember the phone booth cards? They also functioned on the basis of decreasing impulses – with electronic money it is exactly the same.
First, as we wrote above, transfer to the electronic purse the selected amount of money, which will be saved in the form of electronic impulses. Their quantity will decrease as we make further purchases, without involving bank accounts: neither ours nor the seller. In the case of payment or debit cards, finances are stored in bank accounts. By using one of the cards, we gain access to them. There is a flow of money between two bills. This is the basic difference between such a non-cash payment method and the use of electronic money. Another concerns the purpose of the funds that we collect either on payment cards or on prepaid ones. We will pay lower bills with electronic impulses, while non-cash transactions will be used when paying higher amounts.
Electronic money and the law
In 2015, the Polish Financial Supervision Authority issued a statement regarding doubts as to the operations of one of the financial institutions. He emphasizes that electronic money cannot be equated with bank money. Information on differences can be found in the Act on electronic payment instruments services (Journal of Laws 2002 No. 169 item 1385). Another law regulating this activity is the Banking Law (Journal of Laws of 1997, No. 140, item 939). According to them, these are funds stored in electronic form issued on the basis of customer purchase. By this is meant the obligation to deposit money directly onto the media before using.
Is electronic money safe?
Electronic money was created as a substitute for cash, but it cannot completely replace it. Although she, too, guarantees her anonymity, but from the legal point of view, they are not considered a means of payment or a liability to the central bank. This is why non-cash money does not have to be accepted everywhere – only selected sales outlets have this option.
What about security issues? Cash payments are secured physically (PIN code, customer number and password), in the case of electronic money this is done using cryptography. Transaction authentication works by transforming plaintext so that a third party treats it as a random string of characters. There is no chance that there will be any abuse here, and therefore the use of electronic money should be considered completely safe.
Cash vs. electronic money
Poland remains at the forefront of countries whose citizens prefer card payments. The average in Europe is 69%, whereas in our country as much as 83% of Poles choose this form of payment. Such data can lead to the conclusion that since cashless payments have accepted so quickly, the same will happen with electronic money. This is not entirely the case, although the tendency to limit the use of cash will probably increase. Research shows that although we pay less and less in cash, we are still attached to this form of payment and we need it. So for now no revolution in this area is to be expected.