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E-money
E-money refers to stored-value or prepaid payment instruments that allow users to conduct financial transactions in electronic form. There are several types of e-money including centralized systems run by companies like PayPal, decentralized systems like Bitcoin that use blockchain technology, mobile e-wallets, and offline anonymous e-cash. While e-money provides benefits like convenience, security, and lower costs compared to physical currency, it also presents risks like fraud that need to be addressed through technology and regulation. Overall e-money is poised to greatly expand digital financial inclusion if these challenges can be overcome.
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E-money
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- 2. Submitted to: Md. AbulKashem Associate Professor& Chairman Department of MIS, University of Dhaka. Presented By: Zakaria Hasan (61324-17-006)
- 3. Presentation On Thesis Report On Electronic Money(E-Money) Department of Management Information Systems (MIS) Faculty of Business Studies University of Dhaka
- 4. Currency The term‘currency’ is derived from the Middle English word ‘curraunt’, meaning “in circulation” Currency is what most people think money is! Currency is a tangible concept that is based on the intangible money Currency is the promissory note or coin that is presented in form of money Currency is what brings money to life
- 5. Currency Vs. Money 'Money' and 'currency' should not be used interchangeably Money is unreal, meaning imaginary, intangible Currency is NOT money, but merely represents money
- 6. Money Everyone usesmoney. We all want it, work for it and think about it Money is what we use every day to pay our liabilities, and this includes currency Money is a store of value and maintains its purchasing power over a long period of time Four basic functions: - Medium of Exchange - Store of Value - Standard of Deferred Payment - Unit of Account
- 7. History of Money Bartering& Exchange Cowrey Shells (1200 B.C.) Metals(1000 B.C.) Paper Money (1000 A.D.) Coins (600 B.C.) Banking in Europe (1400 A.D.) Wampum (1637) The Gold Standard (1816) Credit Card (1950) Plastic Money (1990s) Google Wallet & Clear Exchange (2011)
- 9. Types of Money The major types of money are: 1. Commodity Money 2. Representative Money 3. Standard Money 4. Receipt Money 5. Fractional Money 6. Token Money 7. Coins & Coinage 8. Fiduciary Money 9. Paper Money 10. Fiat Money 11. Commercial Bank Money 12. Electronic Money (E-Money)
- 10. E-Money Electronic Money Electronic money is money which exists only in banking computer systems and is not held in any physical form Electronic money, or e-money, is the money balance recorded electronically on a stored-value card It may refers to several systems which enable a buyer to pay electronically by transmitting a unique number (called digital certificate) similar to a banknote number. In economic terms electronic money is monetary value provided by the issuer on demand, expressed in government or private monetary units stored in electronic form on an electronic device.
- 11. Types of E-Money Hard Vs. Soft E-Money -Hard Electronic Money does not allow reversing charges i.e. it supports only Non – Reversible transaction -Soft Electronic Money allows payment reversals. The payment is reversed only in case of dispute or fraud. Identified and Unidentified E-Money -Identified E-money, such as credit card transactions, is a form of e-money that allows the user who withdraws the money to be tracked. It allows banks to track the payment throughout the economy. Unidentified money can be withdrawn from the bank and used like paper money. Online and Off-line E-Money -Online means we need to interact with bank to do a transaction with a third party. Offline means we can do a transaction without having to directly involve a bank.
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- 13. Different Systems ofE-Money Electronic Money includes four different systems namely: 1. Centralized Systems, 2. Decentralized Systems, 3. Mobile sub-systems/Digital Wallets, 4. Offline Anonymous Systems.
- 14. Centralized Systems Manysystems—such as PayPal, eCash, WebMoney, Payoneer, cashU, and Hub Culture's Ven will sell their electronic currency directly to the end user. Other systems only sell through third party digital currency exchangers.
- 15. Decentralized Systems Bitcoin Monero Litecoin Ripple Monetary System Dogecoin Nxt
- 16. Bit Coin Bitcoinis a digital asset and a payment system invented by Satoshi Nakamoto, who published the invention in 2008 and released it as open-source software in 2009 The system is peer-to-peer; users can transact directly without needing an intermediary Transactions are verified by network nodes and recorded in a public distributed ledger called the block chain. The ledger uses bitcoin as its unit of account. The system works without a central repository or single administrator, which has led the U.S. Treasury to categorize bitcoin as a decentralized virtual currency. Bitcoin is often called the first cryptocurrency
- 19. Monero Monero (XMR)is a cryptocurrency created in April 2014 that is focused on privacy, decentralization and scalability. Unlike many cryptocurrencies that are derivatives of Bitcoin, Monero is based on the CryptoNote protocol and possesses significant algorithmic differences Monero is an open-source pure proof-of-work cryptocurrency. It runs on Windows, Mac, Linux and FreeBSD
- 20. Litecoin Litecoin isa peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone in the world. Litecoin is an open source, global payment network that is fully decentralized without any central authorities Litecoin was released via an open-source client on GitHub on October 7, 2011 by Charles Lee, a former Google employee.
- 21. Ripple Monetary System Ripple is a real-time gross settlement system (RTGS), currency exchange and remittance network by Ripple. Also called the Ripple Transaction Protocol (RTXP) or Ripple protocol, it is built upon a distributed open source Internet protocol, consensus ledger and native currency called XRP (ripples). Released in 2012, Ripple purports to enable "secure, instant and nearly free global financial transactions of any size with no chargebacks.“ An RTGS system is a gross settlement system of money or securities in which both processing and final settlement of funds transfer instructions can take place continuously
- 22. Dogecoin Dogecoin (/do k n/ dohzh-koyn, code: DOGE,ˈ ʊʒ ɔɪ symbol: Ð and D) is a cryptocurrency featuring a likeness of the Shiba Inu dog from the "Doge" Internet meme as its logo. It was introduced on December 8, 2013. Started as a "joke currency" in late 2013, Dogecoin quickly developed its own online community and reached a capitalization of USD 60 million in January 2014.
- 23. Nxt Nxt isa radically enhanced cryptocurrency built from scratch, delivering a unique and decentralized financial platform. Not only does it open up new possibilities – from digital money to transfer of shares – but it addresses all of the most serious deficiencies in existing cryptocurrencies. Nxt is an open source cryptocurrency and payment network launched in November 2013 by anonymous software developer BCNext. It uses proof-of-stake to reach consensus for transactions - as such there is a static money supply and, unlike bitcoin, no mining.
- 24. Mobile Sub-Systems/ DigitalWallet A number of electronic money systems use contactless payment transfer in order to facilitate easy payment and give the payee more confidence in not letting go of their electronic wallet during the transaction. In 1994 Mondex and National Westminster Bank provided an 'electronic purse' or to residents of Swindon On September 9th, 2014 Apple Pay was announced at the iPhone 6 event. In October 2014 it was released as an update to work on iPhone 6 and Apple Watch. It is very similar to Google Wallet, but for Apple devices only. GNU Taler is an anonymous, open source electronic payment system currently (September 2015) in development. BKasH is the leading payment system in Bangladesh
- 26. Payment system ofE-Money The payment system of E-money is an international terminal network. Major components are: i. Operator/ network provider ii. Distributor iii. Money Transport Organization
- 27. Comparison Advantages Privacy &Confidentiality Security Environment Friendly Mobility Anonymity Record of Transactions Disadvantages Fraud The double spending of digital coins Complexity Security Laws and regulations Mass Exposure Cross Transactions
- 28. Security Measures ofE- Money Encryption IT infrastructure Complexity Deep Web IT Knowledge Availability of Information
- 29. Future of theE-Money
- 30. Recommendations E-Money reducesoverall cost of operation drastically compare to Paper money E-Money is more environment friendly as there is no need of paper and no paper means no cutting down tree. As the technology is new, there are some security and stability concern about “E-Money” which are controllable in most of the case. There should be some legal guidelines and law about e- money to prevent money laundering and other unethical uses of e-money. Banks and Financial Institutes and Government should come forward and work along with the Tech-Giants such as Google, Apple, Microsoft, Facebook etc. to develop the revolutionary but secured and stable transaction system using “E-Money.”