ECN 506 Lecture Notes - Lecture 2: Stored-Value Card, Deposit Account, Savings Account
Document Summary
Two new ways of purchasing goods and services: stored-value cards and e-money, are less common than electronic transfers from checking accounts. But they are potentially more important in the sense that they may change what counts as money in the definition of m1. Stored value card: card issued with a prepaid balance that can be used for purchases. Looks like a debit or credit card. For example, you might pay in cash and receive a card with that balance. When you buy things with the card, the balance is reduced. Some cards can be reloaded you make additional payments to increase the balance. Many stored-value cards can be used for only one purpose. Common examples include calling cards issued by telephone companies, gift cards issued by stores, and fare cards issued by transit systems. Since 1999, many of these cards have been associated with the visa and mastercard networks.
