Macroeconomics - E-Money

            The idea of sending money via email has been only a dream for the past few years. Now you can send money to people via the Internet in a variety of different ways and from a variety of different companies. The most successful e-cash provider to date has been PayPal. The company claims to do $10 million a day in transactions for more than 10,000 merchants, including the very successful eBay. .
             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 process takes about 2 to 3 days to complete. Another way is to have the company send you an actual check in the mail. .
             A very big concern for many people about sending money via is the Internet is security and privacy. Given the extreme ease of sending money, security measures have to kick in somewhere along the line. Most places have a daily sending and receiving limit to help reduce the chance of fraud. Privacy of information is another concern of the users. Most provide guarantees that personal information will only be used by them and not sold or traded to anyone else.
             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.