Why the future of money will be “pre-paid”

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Why the future of money will be “pre-paid” Peter Howitt of the Gibraltar E-Money Association says “e-money” transactions have the power to disrupt traditional banking and even reduce economic exclusion by New Statesman Published 9 September, 2014

A woman in Tokyo displays an "e-money" card and a portable kit to show its value (Getty) New Statesman: What exactly is "e-money"? Peter Howitt: Electronic money, or “e-money”, largely describes the alternative payment products to bank accounts and credit and debit cards. One of the most notable new entrants in this industry is Facebook. The term “e-money” itself is somewhat of a misnomer, since it suggests that it is an alternative to normal money, when in fact it is merely another form of regulated payment service that involves the use of fiat currencies. The term was invented in Europe for devices that stored value and to distinguish it from existing banking accounts and card devices (such as a debit or credit card). Nowadays, most e-money is linked to a payment account in the name of the customer, and so the payment device itself is usually less relevant. It is also fair to say that use of the term “e-money” has led to some confusion with virtual currencies such as Bitcoin, which are not currently fully-regulated and that can (or can attempt to) compete with fiat currencies. In North America, e-money is usually called “prepaid”, which is actually a more accurate term for reflecting how the process works: by


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