Survey of Electronic Money Developments

May 2000

Foreword

In recent years there has been considerable interest in the development of electronic money schemes. Electronic money has the potential to take over from cash as the primary means of making small-value payments and could make such transactions easier and cheaper for both consumers and merchants. However, it also raises policy issues for central banks because of the possible implications for central banks' revenues, their implementation of monetary policy and their payment system oversight role. Having considered these issues, the G10 central bank governors announced in 1996 that they intended to monitor closely the evolution of electronic money schemes and, while respecting competition and innovation, to take any appropriate action if necessary.

Since then the Bank for International Settlements (BIS), through the Secretariat to the Committee on Payment and Settlement Systems (CPSS) and with the invaluable help of central banks worldwide, has been regularly surveying electronic money developments. The main focus of this exercise has been to ensure that central banks have adequate information to monitor the growth of electronic money and to assess its possible consequences. However, given the widespread interest in this new means of making payments, the CPSS has now decided to also make this report on electronic money developments publicly available.

Electronic money products are defined here as stored value or prepaid products in which a record of the funds or value available to the consumer is stored on a device in the consumer's possession. This definition includes both prepaid cards (sometimes called electronic purses) and prepaid software products that use computer networks such as the internet (sometimes called digital cash). These products differ from so-called access products that allow consumers to use electronic means of communication to access otherwise conventional payment services (for example, use of the internet to make a credit card payment or for general "online banking").

This report provides information on electronic money products that are in use or being planned in 68 countries or territories. The information relates to late 1999 or early 2000. The report also includes some information on the policy stance adopted by the various authorities concerned, including central banks. The CPSS Secretariat would like to thank all the institutions that have participated in the survey and agreed to make information available for this report. The Secretariat welcomes comments on the content or the format of the survey (e-mail: cpss@bis.org, subject line: "e-money", fax: +41 61 280 9100).

A number of publications relating to electronic money have already been published under the auspices of the BIS. These include Security of Electronic Money (a joint publication by the CPSS and the Group of Computer Experts, August 1996), Implications for Central Banks of the Development of Electronic Money (BIS, October 1996) and Risk Management for Electronic Banking and Electronic Money Activities(Basel Committee on Banking Supervision, March 1998). We hope that this survey of electronic money developments will provide a useful addition to this list. The survey is available on the BIS website (www.bis.org).

Gregor Heinrich, Head of Secretariat Masayuki Mizuno, Member of Secretariat
Committee on Payment and Settlement Systems Committee on Payment and Settlement Systems