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This article examines the future of e‐money as a payment instrument and some of the microeconomic policy issues it will raise. The paper is in two parts. This first part focuses on the various forms which electronic money is likely to take in the future, and considers key technological and economic factors that will shape its evolution. Part 2, to be published in the next issue of foresight, examines some of the major regulatory and institutional issues that are likely to have a bearing on the adoption of e‐money, notably concerns related to the regulation of payment systems, security, privacy and consumer protection.

Reviews the payment environment and “proliferation” of new payment services on the market. Highlights the cost reduction benefits to financial institutions of cash replacement. Defines the scope of digital money as encompassing both electronic purse money and software money. The fundamental differences in basic philosophy, design principles and technical choices of the variety of approaches to electronic cash are evaluated. Three key directions are identified to accelerate the take‐up of digital money. Urges that the regulatory regime necessary to ensure financial integrity of non‐bank issuers is developed without stifling innovation and competition or consumer confidence. EU commission directives and the findings of a multinational alliance of banking institutions are reviewed and recommendations given for new electronic purse products. Pinpoints several useful lessons which have been learnt from electronic purse experiences to date.

This is the second part of a two‐part paper on the future of electronic payments. Part 1, which was published in the last issue of this journal, examined the various electronic forms of payment that are likely to emerge in the future, and considered some of the main technological and economic factors that will shape this evolution. This second part focuses on major regulatory and institutional issues that will influence the wider acceptance of electronic payment.

Highlights the key features and differences between cash and electronic money and the benefits the former cannot deliver. However, consumer confidence is seen as the vital factor in acceptance of the latter. Summarises the four main areas identified by the European Commission in 1997 where public bodies can boost confidence. Ensuring stability and soundness of issuers of electronic money by defining an appropriate supervisory framework is seen as vital, as is the provision of guidance for issuers and users on liability and redress procedures. Clarification of EC competition rules is necessary to achieve an appropriate balance between interoperability and competition in these markets. Security also needs to be improved to tackle the risks of fraud, counterfeit, tax avoidance and money laundering. Reviews EU recommendations designed to cope with future development of card payment systems.

This paper examines the mismatch between the impersonality of electronic money on the one hand and Australian customers’ desire to have a personal banking relationship on the other. This gap is illustrated by a critical appraisal of literature relating to the sociology of money, the adoption of information and communication technologies and self‐service technologies. The paper argues that bank‐marketing professionals adopt an activity‐centred social marketing strategy. This strategy places customers and their activities at the centre to help ensure a fit between payment activities, services, and values relating to money within different cultural contexts. The strategy has managerial implications for, when payments services are tracked according to customers and activities, the data required are different from data generated by following customer segments and products. An activity‐centred social‐marketing strategy has the potential to increase trust in banks and halt the shift of financial relationships to intermediaries such as brokers and financial planners.

The transnational criminal certainly feels comfort faced with almost limitless option buttons, when surfing the ‘global cyber candy shop’ from the comfort of his cyber cafe armchair. The physical marketplace is rapidly transforming itself into a global electronic arena, where the multicultural consumer and its market‐driven society merge and execute limitless electronic transactions at the touch of a trader's dealing screen, electronic transfers, credit and debit cards, smart cards, and so on. These are just some of the mediums which are now exploited by the money launderer without leaving paper/audit trails for law enforcement agencies and compliance communities. Advances in communications, information systems and cyber electronic innovations increasingly dispel the myth that crime stops at the border.

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

Each decade, the global financial services industry spanning Western and Eastern economies, appears to enter another period of transformation, not only in terms of new financial products, but also mechanisms and methods of transaction. The technological issue that is currently sapping the energy of ministers throughout the developed and developing world, as well as computer experts, is the millennium bug syndrome. It is encouraging that policy makers and electronic experts are uniting in their efforts to avert an ‘electronic winter of discontent’ in the year 2000. The expediency of the spread of financial services throughout the global electronic arena, facilitated by the removal of real and visual borders, is set to reduce the current technological problems to miniscule proportions. Yet at present the response to the technological issue of even greater importance, Cybercrime, has resulted in discord, disagreement and apathy.

The purpose of this paper is to analyze the regulatory framework of e-money transactions in terms of consumer protection approach, the base for regulatory and supervisory system.

This research is based on descriptive-qualitative studies in electronic and cyber commerce. The authors have first explained the importance of regulation for consumer protection and have then showed the position of regulation in e-money; thus, the authors have noted two important and predominant concepts of consumer protection: safe arrangement in e-money and problem of information secrecy and asymmetry. The leading approach in this paper is for efficient allocation of resources between dealers and player of this scope and the authors find consumer protection as the best regulation instrument in this way.

The paper argues that e-money is an efficient and user-friendly payment system and might be used as a general means of payment in the real and virtual worlds. This finding provides a major reason for regulatory frameworks in e-money.

Some important regulation applications in this new scope of commerce involve indirect interference and making orders in transactions. In this paper, the authors have focused on consumer protection regulation that may have a positive effect on dealers, businessmen and women in the long run; thus, this approach also compares other studies within the scope of e-money.

The purpose of this paper is to stimulate some reflections on the potentially contradictory relationship between the adoption of innovative payment instruments and the prevention and fight against financial crime. The ideal addresses of the paper are regulators in these two fields (Central Banks; Financial Intelligence Units).

The paper is largely based on reflections coming from the author's background as a central banker with a long experience in the statistical analysis of financial data with an anti‐money laundering (AML) focus.

The paper takes the move from the present and prospective characteristics of the payment means and moves on to analyse briefly the possible implications of their evolution in the fight against money laundering and the financing of terrorism. The analysis shows how some factors that make innovative payment instruments desirable may, at the same time, represent elements of weakness in the prevention of financial crime.

The paper addresses a number of theoretical and systemic issues but no specific data or calculations are provided to evaluate alternative regulatory scenarios. Further studies could offer a more quantitative approach, in an attempt, for instance, to estimate the costs and benefits of the evolution of the praxis and legislation in the field of payment system and AML.

The paper openly tackles the cross effects of regulation in the financial sector, specifically addressing the potential risk factor represented by loosely regulated innovations of the payment instruments. The argument is intended to highlight both the importance of technological evolution and the necessity of a proper supervision over potential loopholes and unguarded passages that could be exploited by financial criminals.

The paper addresses questions of particular relevance in the present, fast developing world of advanced technological payments and global financial crime. The author underlines explicitly how these two fields share some common features; an original argument is developed with reference to the possible risk of unwanted spillovers between these two areas of public interest.