How to use an e-money
Simply put, electronic money or e-money is money you exchange electronically. It is an actual electronic equivalent of cash. You can use it and conduct e-currency transactions over the internet, with cards linked to your account or using smartphones. It’s becoming more and more popular nowadays, enabling people to work from home, shop online, pay for services conveniently and promptly.Benefits of using an e-money
E-money has already brought lots of advantages and new opportunities for both individual users and businesses. It helps to send mass payments, payouts to remote workers or freelancers easily and hassle-free. People are using it to pay for goods or services, transfer funds to friends or relatives, pay for utility bills. The best part is that such transactions are carried out instantly so problems such as waiting in line or payments being late are no longer valid. Further, you can transfer funds electronically not during bank working hours and even on holiday. E-money saves not only time but money as well. It’s reliable, fast and has low costs of transaction. It’s most probably the best choice when talking about international transactions as you don’t have to deal with the hassle of currency exchange at all.Is using an e-money safe?
Electronic money is also safer than cash. If you lose cash, it’s the end of the story, but in case of any issue with e-money you can always easily block your card or mobile wallet remotely. This is especially important while being abroad, when such situations can cause great inconvenience. It’s also especially appreciated by those who like to keep track of their spending and have records of all the transactions done. You get all the necessary information about your spending habits and have access to it anytime anywhere. So think no more and go digital. Forget about carrying cash, loads or cards and queuing for ATM withdrawals – try instant digital transactions and we promise you will never look back.Electronic money is only useful when there is somewhere to keep it and something to spend it with. An e-wallet linked to a card turns the balance into ordinary payments — in shops, online and between users. SharPay opens the wallet in a few minutes and issues a card to it.
What e-money is in legal terms
Electronic money is not a metaphor for “money in an app”. It is a defined product: monetary value stored electronically, issued on receipt of funds, and accepted as payment by parties other than the issuer.
Two consequences follow, and they are the practical ones.
It is always backed one to one. An e-money institution issues exactly as much as it receives. It cannot lend your balance out the way a bank lends deposits.
Client funds are safeguarded separately. The institution must keep them apart from its own money, typically in a segregated account at a credit institution. That is the protection mechanism — not a deposit guarantee scheme, because an e-money balance is not a deposit.
This distinction matters when comparing providers. The EU deposit guarantee of up to 100 000 euro per depositor applies to banks. An e-money institution protects your balance through safeguarding instead. Neither is the other, and a provider describing itself as a bank while holding an e-money licence is worth a second look.
Where it works well, and where it does not
E-money suits payments: holding several currencies, sending and receiving, paying by card. For most people and most companies that covers daily use completely.
It does not provide credit, overdrafts or interest on your balance — not because providers choose not to, but because the licence does not permit it. If you need financing, that is a bank product and a separate conversation.
You can verify any provider yourself in two minutes. Take the legal entity name from the website footer, not the brand, and look it up in the public register of the regulator named there. The entry states the licence type and what the institution may do.