DEFINITION of Digital Money
Digital money, which can also be called electronic money, refers to money that is exchanged via electronic and often encrypted means. It isn’t just exclusive to ATMs. You’re also using digital money when you receive a direct deposit paycheck, or you’re using your PayPal account to buy something online or paying with credit card. This money is backed by actual fiat money. If you wanted to withdraw real cash from your bank once your paycheck cleared, you could do so.
BREAKING DOWN Digital Money
There are thousands of businesses online that accept digital money for payments including online games, online services, and online retailers. It is also great for money transfers and transactions between individuals across long distances. Unlike with bank transfers and credit cards, transactions with digital money are instant, have low fees, cannot be reversed, and there is no danger of identity theft or fraud. The popularity of digital money is rapidly growing and many experts consider digital money to be a breakthrough in the global payment system.
2020-07-23 • Updated