Technology contributes to the development of an electronic payment system, which is a new approach to the payments system. All transactions conducted electronically are referred to as part of the new system.

With the advancement of information technologies and the development of global economic characteristics, it is clear that the development of the electronic payment system is directly related to those developments.

There are no linear or uniform steps to the process. Electronic system features vary depending on many factors, including the level of development of a country, its openness to overseas markets and its ability to integrate different markets of commodities and money, and its ability to participate in new challenges.

In recent years, the impact of a country’s educational level has become more apparent. Despite the apparent change in traditional banking, many countries still have difficulty accepting new banking practices such as electronic banking.

Definition of e-money

Generally speaking, e-money is the money transferred electronically, and it is the newest instrument in the payment system. However, it remains a challenge to define e-money in a comparatively static way; it is a more complex and precise term.

Regulatory directives stipulate that -money is presented as a claim on the issuer, backed by a monetary value, issued upon receiving funds of a value equal to or greater than the monetary value issued and accepted as payment.

Influence of e-money on financial market

● In the future, electronic money may replace traditional currency. There is a possibility that its effects could influence monetary policy.

● In its early development, -money does not seem to impact monetary policy. Obviously, currency in circulation is a part of the balance sheets and aggregates of the central bank.

● Usually, the low level of currency alternatives in circulation proves that e-money has a small, negligible influence.

● Based on a survey of developments in electronic money and internet and mobile payments (2004) BIS,14 no central bank has reported a negative impact on their balance sheet due to the decrease in the currency of circulation due to e-money.

● Furthermore, no data have been recorded for revenue losses. Though this survey was conducted ten years ago, the results still apply to the current evolution of e-money.

● Each innovation has a distinct life cycle. E-money is a new type of electronic payment instrument — it is an innovation. From the point of conception to removal from the market, each innovation has a unique path.

● Following the first and second phases of their life cycle comes a phase of rapid development and market expansion. In the following phase, interest in this innovation declines, and eventually, the innovation leaves the market in the last phase.

● The dimensions of each phase of the e-money development are impossible to predict. Yet we know the cycle began. Therefore, e-money is expected to expand in the future, and we will likely see a phase of full use of electronic money.

● As e-money penetrates more and more markets, its influence on monetary policy will increase.

● Payment with electronic money will be beneficial, so the monetary policies of each country should be ready to deal with it.

● Further, monetary policy needs to develop an instrument set that can control the rapid growth of e-money usage and integrate this emerging trend into the monetary policy framework.


As ICT develops and its revolutionizing power transforms every aspect of modern life in a society and the global economy, old forms and instruments are replaced with new ones that are not well researched.

Electronic payments are being gradually substituted for traditional methods of payment. One of the most recent payment instruments is e-money, which is slowly gaining popularity.

Undoubtedly, this path is beginning to unfold in developed countries, where education and knowledge are at the highest level and technology is at the forefront.

As a result of electronic banking issues, developing countries will need to adopt new legal regulations for e-money.