E-Money
Outstanding value on e-money storages issued in the euro-area is almost 3 times the value of notes and coins in circulation: €2.454 trillion (notes and coins €890 billion)
Source: BIS Statistics on payment, clearing and settlement systems in the CPSS countries
Electronic money (or e-money) products are defined as stored-value or prepaid products in which a record of the funds or value available to a consumer is stored on an electronic device usually in the consumer’s possession. The electronic value is purchased by the consumer and is reduced whenever he or she uses the device to make a purchase. E-money products need to be distinguished from so-called access products which typically allow consumers to use electronic means of communication to access otherwise conventional payment services (see next section). Two types of e-money products exist:
(1) Card-based products, also known as prepaid cards (and often called electronic purse or electronic wallet), are designed for making face-to-face payments of small value (such as at newspaper stands, in bakeries, etc) and for use in vending machines and parking meters. The prepaid value is typically stored in a microprocessor chip embedded in a plastic card. Electronic purses are intended to complement rather than substitute for traditional retail payment instruments such as debit and credit cards. They are, however, in direct competition with coins and (small denomination) banknotes. Prepaid cards are intended to be used as a general, multipurpose means of payment, in contrast to the many existing single-purpose cards (such as those used for public transport) which are not considered e-money.
(2) Network-based or software-based products use telecommunication networks, such as the internet, to make small-value payments, usually as a substitute for credit cards. Network-based products use specialised software installed on a standard personal computer or laptop for storing the value.
