There are many different forms of money in modern economies. These different forms of money offer different means of payment, which we refer to as the payment system. The most basic form of payment is physical cash. However, more and more payments are becoming digital. The use of debit and credit cards as a means of payment are replacing physical cash in the purchase of goods and services. In addition, electronic funds transfer is a way of moving money digitally between accounts. Technology is changing the way we think about money.

Cashless society is an economy whose payments system is entirely electronic. Sweden is quickly becoming a cashless society. Even in the U.S., there are now stores that do not accept cash. Epic Burger in Chicago, IL, is one example of such a store. Related to this, there is a national discussion in the U.S. about ending the use of the $100 paper bill due to concerns about counterfeit and other illegal activity.

Many of us now use our phones to make payments. Apple Pay and Samsung Pay are examples of this. Because no physical cash or even plastic cards are involved, this is certainly a form of electronic payment. However, it is still based on a system of debit and credit cards, so it is not a form of electronic cash.

Digital currency is the new form of money. Just as money evolved from commodities to paper, money has been evolving from paper to digital forms. Cryptocurrency is digital money that uses encryption to maintain security and privacy. Most cryptocurrencies rely on a technology called blockchain. Blockchain is a technology for sharing information using a distributed ledger.

Glossary

Cashless society. An economy whose payments system is entirely electronic