Macroeconomics - E-Money

The way most e-money provider’s work is that you register for there service and provide them with your basic information such as name, address, and telephone number. You then must provide a way to fund your account, most of the time this is done either by a credit card or a bank account. You then only need an email address to send a person money. The money comes directly out of either you credit card or bank account. For a person to withdraw the money they receive it is usually done by doing an electronic funds transfer to a bank account. Most of the time this proc

A question often asked is how do these payment services make money? Since it’s usually free to send money it seems it would be difficult for the company to make a profit and end the long run the money you send could be at risk. Most services charge a fee to receive the money. It is very similar to a merchant rate charged to businesses by credit card companies. It is usually a flat fee per transaction and then a percentage of the total amount sent. PayPal for example charges a fee of 30 cents and 1.7% of the total amount sent as its fee. Although PayPal has yet to turn a profit the forecast looks strong with its continued growth and an upcoming IPO on the stock market.

I feel that the future of e-money looks very good. More and more people are using a paperless forum of money. Most people now have a credit card and use it regularly to make purchases. Payment services such as PayPal are becoming more and more popular to pay for transactions over the Internet. Many companies now have the

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