Electronic Money in Today's Society

Electronic Money in Today’s Society

The history of money seems almost comical when a student of today’s generation is introduced. At one time cattle and crops were once used as a means of payment. Later on physical forms, such as gold and silver materials, were exchanged. Now there is even talk of coins and bank notes becoming obsolete as we progress to the world of electronic money. Electronic money includes electronic debit and credit systems, different forms of smart cards and digital money . These forms of electronic money are starting a movement towards a “cashless” society where all payments can be handled electronically. The electronic funds transfer system (EFTS) shall be analyzed as well as the Canadian payments system. These systems provide the network and the framework to support electronic payments. When describing the effects of a “cashless” society, one must look at both the positive and negative aspects. Banks will inevitably be affected by the innovation of electronic money. The impact of electronic money on the profitability of banks will be evaluated as well. These reserve centers, where domestic monetary supply is situated, will be seriously breached for the first time. Financial innovation, which has led to a possible world of “virtual” money, is an anticipated development in today’s society by some, but a violation of privacy and authority to others. The effectiveness of monetary policy will indeed have a profound impact in today’s rapidly globalizing world economy .

Electronic Funds Transfer System and the Canadian Payment system

Central to an economy is the payments system; the complex network of instruments, institutions and services used in conducting transactions in the economy. The payments system has been evolving over the centuries, right along with the form of money. Our Canadian payment system illustrates how different forms of monetary assets are transferred to make payments, how long this process of payments...