An Introduction to e-Money
In the last 50 or so years, the rate of money’s evolution has advanced like never before. Card payments, chip and pin, contactless, mobile banking, and most recently, cryptocurrencies, have all pointed the way towards an increasingly cashless society. In 2019 that trend was starkly illustrated as US consumers used cash in just 26% of transactions, down from 30% in 2017¹. In 2020, thanks to widespread health concerns of handling cash, the pace of that change is expected to accelerate considerably.
With cash moving from the physical to the digital realm, it might be expected that banking and financial services have adapted and evolved with the times. In many instances however, that is simply not the case. The harsh reality is that modern payment systems still suffer from an old-fashioned hangover in the form of aging infrastructure and outdated thinking. Worse, the main players often have little incentive to improve that system, since it is there from which they derive a profit.
Legacy banking
The modern banking and payments systems still have a number of areas in which the customer service experience is not up to scratch, though standards vary widely across countries. One such commonly cited problem is access to banking services, which so many consumers continue to grapple with. According to the world bank, around 1.7 billion people worldwide are still without access to a bank account².
For those citizens who do have bank access, they’ll find that if they need to send money overseas, or across borders, that the fees are prohibitively expensive. The average cost of international remittances currently sits at 6.79%³. Put in perspective, this means that for a low value cash transaction of just $300, the bank takes $20.37 in fees. In some areas, the remittance fees rise to an eye-watering 20%.
It’s not individuals who find themselves ill-served by the current system. Small businesses, international companies and NGOs have little difficulty finding pain points in the current system either. Take the small business owner for instance, who will no doubt wish to accept card payments. When doing so a card request must be sent from the cardholder to the merchant through the acquiring bank, then to the credit card network, and finally to the credit card issuing bank which makes the payment. Although the payment may be processed quickly, the pain comes later for the merchant when they realise that every intermediary in that process takes their cut, and a slice out of their bottom line. Add to this service fees, compliance fees, payment processor set up, and chargeback fees, to name a few, illustrate why smaller purchases often incur a loss for the merchant.
For international companies and NGOs, the pain of having money in different territories and requiring to move that money around is very similar in some ways to the individual remittance consumer. However, the sums of money being moved (and lost to fees) are much more vast. That’s just the tip of the problem iceberg. When you consider time delays for processing into account, when money is seemingly lost to the system for days on end it can often appear that international money is an illiquid asset class.
Enter e-Money
To counter the many issues inherent in the current system, e-Money has created a global, fast and frictionless digital cash that can be used as an alternative to the aging, and slow to adapt, legacy banking infrastructure. It is designed for accessibility, transparency and for speed, with near instantaneous settlement and immediate finality.
e-Money is built on distributed ledger technology, offering currency-backed stablecoins for ease of use. This means that on the e-Money network the Euro becomes the eEUR and the dollar becomes the eUSD. This is so that payments and money transfers can be conducted on the e-Money network. At once, the many issues prevalent in banking today, simply no longer apply. Better yet, the e-Money network knows no borders, so remittances and international money transfer for businesses no longer constitute the headache they once did.
To use the e-Money network users may simply buy e-Money tokens on a cryptocurrency exchange with whichever crypto or fiat currency they prefer. They may further opt to use services connected to their local bank. From there, users are free to enjoy the freedom and ease of use of the e-Money network.
Better yet, the e-Money network has a number of safeguards in place to ensure the probity of the network. e-Money has set out from day number one, to comply with all KYC/AML necessary by financial regulators. Further to this e-Money will subject itself to quarterly audits conducted by E&Y, one of the big four accountancy firms, to ensure Proof of Funds.
Conclusion
Progress stands still for nothing and no one, and certainly not for money. In the last few years, cash has digitized, but not every area of the banking sector has moved into the modern age. It is for this reason that e-Money has been created. e-Money is fiat’s layer two solution. A fast, easy to use, globally payment system that upgrades money for the modern age. In upcoming articles we will discuss exactly what makes e-Money’s currency-backed stablecoins so unique in the industry and describe some of the technology and progress the team has already made in realizing their vision.
Until then, for further details on the project keep tuned to e-Money on our other channels:
Twitter: https://twitter.com/emoney_com
Telegram: https://twitter.com/emoney_com
LinkedIn: https://www.linkedin.com/company/e-money/
GitHub: https://github.com/e-money
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