Payment Instruments: E-Money

By Denise Bedell

Use of E-Money by Non-Banks (number of transactions (millions, total for the year))

Use of E-Money by Non-Banks (value of transactions (US$ millions, total for the year))

The European Commission Office of Internal Markets defines e-money—or electronic money—as the digital equivalent of cash, stored on an electronic device or remotely at a server.

Electronic payment can refer just to e-commerce—or payments for buying and selling goods or services offered online—or to any type of electronic funds transfer.

Use of e-money is still in its infancy in comparison with more mature payments channels, such as checks and direct debits. In fact, according to data from the BIS Committee on Payment and Settlement Systems (CPSS), e-money accounts for just 0.23% of the total value of payments in Singapore and 0.06% in Italy. In other CPSS countries it makes up even less of the payments market (see Payments Volumes Worldwide).

However new technology developments and regulatory initiatives around electronic payments hold the promise of vastly increasing payments traffic through this channel, particularly in the consumer space.

With mobile payments technology—such as Near Field Communications (NFC) advancing rapidly and those in the payments and mobile space—from system providers to banks to mobile service providers—pouring resources into its development, this will further push development of the e-money usage.

In addition, modern payments infrastructure and the rapid increase in mobile penetration in emerging markets—especially within Asia (see Global Broadband Penetration Rates) —may drive e-money growth in developing countries faster than many developed markets.

Data is from the Bank for International Settlements' Committee on Payments and Settlement Systems (CPSS) Annual Payments Statistics, March 2011.

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Use of E-Money by Non-Banks (number of transactions (millions, total for the year))

* Different methodology and data collection method since reporting year 2007.

Use of E-Money by Non-Banks (value of transactions (US$ millions, total for the year))

* Different methodology and data collection method since reporting year 2007.

**Sum or average excluding those countries for which data are not available.