What is Digital Money?

Have you noticed lately how few things you actually pay cash for? Perhaps you take out a dollar or two to buy a soda, but you may just as easily swipe an ATM card as search your pockets for change. When you use your ATM card instead of dollars or cents, you are using just one type 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 it when you use your paypal account to buy something online. This money is backed by actual dollars. If you wanted to withdraw real cash from your bank once your paycheck cleared, you could do so.

It would be difficult to escape using digital money in today’s times. It’s very hard to order things online unless you want to send in a check or possibly even cash and wait until your order can be placed. Instead of taking this long route, paying with a credit card or ATM debit card proves much easier, and is potentially safer than sending cash or a check through the mail. It’s also easier to get refunds to your account if you return items.

Of course people have concerns when they use digital money, especially with unknown sources. If you order something online, you may not know the degree of protection that is afforded you or if you’re working with a scam business. It helps to choose online vendors that are well known to avoid exposing your bank account to unscrupulous folk. The whole issue of digital money does engender multiple industries that produce payment intake and disbursement systems and that work to protect your money, as you are often paying for things digitally from your main bank account.

When ATM cards were introduced, not all places could accept them, and even if a place did accept an ATM card as digital money, they didn’t necessarily accept all cards. Today, that has changed dramatically, and most places online and locally will accept almost all cards, regardless of the bank they come from. Moreover, countries and industries are finding new ways to make use of digital money. You may be able to use an ATM or credit card to pay bridge tolls or get on a bus, or to pay for metered or private parking.