Discussion Paper/Document d’analyse 2014-2 Electronic Money and Payments: Recent Developments and Issues by Ben Fung, Miguel Molico and Gerald Stuber Bank of Canada Discussion Paper 2014-2 April 2014 Electronic Money and Payments: Recent Developments and Issues by Ben Fung,1 Miguel Molico2 and Gerald Stuber1 1Currency Department 2Financial Stability Department Bank of Canada Ottawa, Ontario, Canada K1A 0G9
[email protected] [email protected] [email protected] Bank of Canada discussion papers are completed research studies on a wide variety of technical subjects relevant to central bank policy. The views expressed in this paper are those of the authors. No responsibility for them should be attributed to the Bank of Canada. 2 ISSN 1914-0568 © 2014 Bank of Canada Abstract The authors review recent developments in retail payments in Canada and elsewhere, with a focus on e-money products, and assess their potential public policy implications. In particular, they study how these developments will affect the demand for bank notes, and the central bank’s balance sheet and its seigniorage revenue, which as a result might affect the central bank’s ability to implement and conduct monetary policy and to promote financial stability. Other public policy issues, such as safety and efficiency, and user protection as well as legal, security and law enforcement, are also considered. While the demise of cash is not imminent, it is important for the central bank to continue to evaluate its potential roles with regard to e-money. JEL classification: E41, E42 Bank classification: Bank notes; E-money; Financial services; Payment clearing and settlement systems Résumé Les auteurs analysent l’évolution récente des paiements de détail au Canada et à l’étranger, en se concentrant sur les produits de monnaie électronique, et évaluent leur incidence possible sur les politiques publiques.