Electronic Money

AAA

DEFINITION of 'Electronic Money'

Electronic money is money which exists only in banking computer systems and is not held in any physical form. In the United States, only a small fraction of the currency in circulation exists in physical form. The need for physical currency has declined as more and more citizens use electronic alternatives to physical currency.

INVESTOPEDIA EXPLAINS 'Electronic Money'

In the U.S. many people receive their paychecks through direct deposit, move money with electronic fund transfers, and spend money with credit and debit cards. While physical currency still has advantages in certain situations, its role has gradually diminished. While it might seem to be a worrying thought that your bank account balance is nothing but an entry in a computer system, it is really nothing new. Fiat paper currency has no inherent worth either.

RELATED TERMS
  1. Fiat Money

    Currency that a government has declared to be legal tender, but ...
  2. Digital Currency Exchanger - DCE

    A market maker who exchanges legal tender for electronic currency, ...
  3. Electronic Funds Transfer Act

    A federal law that protects consumers engaged in the transfer ...
  4. Electronic Transfer Account - ETA

    A bank account for federal payment recipients who do not have ...
  5. Automated Clearing House - ACH

    An electronic funds-transfer system run by the National Automated ...
  6. Direct Deposit

    Electronic funds that are deposited directly into your bank account ...
RELATED FAQS
  1. No results found.
Related Articles
  1. Retirement

    Payroll Deductions Pay Off

    Find out how you can bypass or defer taxes on thousands of dollars each year.
  2. Credit & Loans

    Credit, Debit And Charge: Sizing Up The Cards In Your Wallet

    Not all plastic is equal! Learn the difference between the three kinds, and how each can affect your finances.
  3. Entrepreneurship

    Run Your Finances Like A Business

    Think of yourself as your own little company. To make it run smoothly, you need to take a look at your books.
  4. Credit & Loans

    Help Your Kids Understand Money

    These simple tips will help you raise financially savvy kids.
  5. Credit & Loans

    5 ATM Scams That Can Break The Bank

    Don't get scorched by ATM thieves who want to burn a hole in your wallet.
  6. Investing

    Sina Weibo and Twitter: What's The Difference?

    Sina Weibo is China's version of Twitter, but how do the Chinese Twitter and actual Twitter stack up against each other?
  7. Stock Analysis

    What’s The Highest Dividend-Paying Tech Stock?

    Technology stocks tended not to pay dividends, preferring to reinvest available capital back into their respective businesses to accelerate their growth.
  8. Savings

    Mortgage Faceoff: Bank of America Vs. Wells Fargo

    Which bank offers the better mortgage deal? Here's how they compare on two popular types of mortgage.
  9. Investing

    Is There An Upside For Isis Pharmaceutical Shares?

    Shareholders in biotechnology company Isis Pharmaceuticals have endured a wild, but ultimately enjoyable, ride since late 2012.
  10. Investing

    What Are The Prospects For Plug’s Technology?

    Plug Power's fuel-cell technology has huge promise, but it hasn't paid off yet. Few stocks have seen the volatility that it has experienced during the past

You May Also Like

Hot Definitions
  1. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  2. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  3. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  4. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  5. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  6. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
Trading Center