Electronic Money


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.

BREAKING DOWN '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.

  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. Direct Deposit

    Electronic funds that are deposited directly into your bank account ...
  6. Automated Clearing House - ACH

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