Electronic money

 

Updated in November 2019

Summary

  • Electronic money: definition
  • The physical medium of electronic money
  • Electronic money: how it works
  • The benefits of electronic money

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With the development of the internet, and after the boom in online payments, new and very modern payment solutions are coming along. Consumption patterns are constantly changing.

With the unquestionable power of the net giants combined with the inventiveness of Fintech, we see many new payment methods coming onto the market. The electronic money takes on a real importance in our daily payment habits.

 

Electronic money: definition

The concept of electronic money officially exists since 2013, as defined in Article L. 315-1 of the Monetary and Financial Code.

E-money is a substitute for cash (coins and notes), stored in an electronic or magnetic device or on a remote server.

E-money can also be stored (and used) on mobile phones. Payment information is then stored on the smartphone's SIM card and is subject to security encryption (the standard used in France is the "SIM centric") and uses NFC (Near Field Communication) technology to authorise payments, or on an online payment account.

The physical medium of electronic money

The most common electronic media are :

  • the electronic wallet, also known as the "e-wallet" (e-wallet in English): a virtual wallet that allows you to make purchases on the Internet without using your credit card number, since an amount is first loaded into the wallet.
  • prepaid bank cards;
  • the virtual bank card, available in some network banks:
    • E-card: Banque Postale, Banque Populaire, BRED (regional discount and deposit bank), Caisse d'Epargne, LCL (Crédit Lyonnais), Société Générale,
    • Virtualis: Crédit Mutuel,
    • Payweb Card: at the CIC (Crédit Industriel et Commercial),
    • Some online banks such as Axa Banque, e.LCL and Fortunéo offer this service;
  • gift cards from a commercial sign;

 

Electronic money: how it works

The use of e-money is as simple as using cash (coins or notes). The amount of money is loaded onto the medium.

 

The benefits of electronic money

The advantages of using electronic money are as follows :

  • without question, it's the speed of execution that counts;
  • less information to enter, therefore less fraud;
  • there is no monetary exchange so there is no risk of non-payment;
  • the minute cost compared to the amount of commission that the banks retain on each payment made by CB (bank card).