Electronic money movement is the transfer of funds between accounts using digital systems rather than physical cash or paper instruments such as cheques. In 2024, the global value of digital transactions was $17.73 trillion. This includes a broad range of transactions facilitated by banks, payment networks, and financial technology providers. Digital transactions can occur within a single institution or across multiple financial entities.

Below, we’ll discuss the different types of electronic money movement and the impact they have on businesses.

What’s in this article?

• Why is electronic money movement so important for businesses?
  
• What are the common methods of electronic money movement?
  
• What are the risks associated with electronic money movement?
  
• How does Stripe facilitate electronic money movement?
  

Why is electronic money movement so important for businesses?

Electronic money movement provides businesses with fast payments, control, predictability, and the ability to scale without bottlenecks. A business that moves money well operates more effectively, pays fewer fees, and keeps customers and suppliers happy. Here are some benefits of electronic money movement for businesses.

Faster growth

If you have to wait days or weeks for money to enter your account, that’s time you can’t spend reinvesting in inventory, marketing, or payroll. Some payment methods give quicker access to revenue than others. So you might want to choose real-time payments over Automated Clearing House (ACH) transfers or negotiate faster settlement terms with your payment processor.

Wide appeal to customers

Customers want to use their preferred payment methods whenever possible. If you don’t provide them with options – such as credit cards, digital wallets, bank transfers, and buy now, pay later (BNPL) – they might look for a business that does.

Dynamic payments for all parties

Suppliers want their money on time, and employees expect their pay without delays. Businesses that manage multiple vendors, contractors, and teams in different locations need payment methods that work across borders and banking systems. The electronic payment methods you choose affect how money comes in and how easily it goes out.

Healthy margins

Every payment method has pros and cons, and businesses that don’t pay attention cannot take full advantage of them. Refining payment processing – through lower interchange rates, real-time payment networks, or negotiated processing fees – can make the difference between a healthy margin and unnecessary financial loss.

Security and fraud prevention

Handling money electronically introduces risks, including chargebacks, fraud, and regulatory compliance issues. Businesses need systems that can catch fraud early on, protect customer data, and reduce exposure to costly disputes. The challenge is to make transactions safe without adding obstacles that slow down payments or drive customers away.

What are the common methods of electronic money movement?

Electronic money movement encompasses a variety of payment methods, each of which is designed for different use cases, speeds, and levels of security. These methods include the following.

Bank transfers

• ACH transfers: A batch processing system for bank-to-bank transfers, generally used for payroll, bill payments, and direct deposits

• Wire transfers: Faster, direct bank-to-bank transfers, often used for large or international transactions

• Real-time payments: Immediate bank transfers that clear and settle instantly, used for urgent transactions

Card-based transactions

• Credit card payments: Payments made with credit through card networks (e.g., Visa, Mastercard)

• Debit card transactions: Money directly withdrawn from a linked bank account at the point of sale

Digital wallets and mobile payments

• Digital wallet payments: Contactless payments with securely stored payment details through digital wallets such as Apple Pay, Google Pay, and Samsung Pay

• Mobile payment apps: Peer-to-peer and business payments that use linked bank accounts, cards, or stored balances in mobile apps such as Venmo, Cash App, and Wise

Cryptocurrency and blockchain-based transfers

• Bitcoin, Ethereum, and Tether: Decentralised transfers with fast settlement, often employed for cross-border transactions
  

Electronic chequs

• Digital versions of paper cheques: Photo images of cheques processed via electronic payment networks and commonly used for rent, invoicing, and recurring payments
  

BNPL services

• Affirm, Klarna, and Afterpay: Short-term instalment financing for online and in-store purchases
  

What are the risks associated with electronic money movement?

With every tap, transfer, and automated payout, there’s some degree of risk. Fraud, system failures, and regulatory non-compliance can drain revenue, damage reputations, or even halt operations. And as payments get faster, the window for detecting and stopping problems gets smaller. Here’s what businesses should pay attention to.

High-speed fraud

With each advancement that speeds up payments, someone is figuring out how to exploit it. Real-time payments are great not just for businesses but also for criminals. Phishing attacks, synthetic identities, and account takeovers can create problems for any business that processes payments.

Chargebacks

Card payments come with a catch: if a customer disputes a charge, businesses often lose out. Chargebacks cost money in fees and lost revenue, regardless of whether they’re friendly fraud (i.e., a customer makes a legitimate purchase but later claims they didn’t authorise it) or legitimate disputes. A business that experiences too many chargebacks might struggle to find a payment processor that will work with it.

System failures

Bank outages, processor downtime, and application programming interface (API) failures can all cause payment systems to go offline and sales to stop. For businesses that rely on automated payouts (e.g., payroll, supplier payments, subscription billing), a single glitch can create a chain reaction of delays, fees, angry vendors, and other consequences.

Intricate compliance

Businesses that handle digital transactions follow an ever-changing maze of regulations – the Payment Card Industry Data Security Standard (PCI DSS) for card payments, Anti-Money Laundering (AML) rules, the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA) for data privacy, and new crypto regulations. Non-compliance can have serious consequences.

Hidden costs

Every transaction comes with a cost – interchange fees, wire fees, ACH fees, currency conversion fees, and platform fees. Businesses that don’t refine their payment flows often lose money in ways they don’t realise, including overpaying for processing and failing to negotiate better rates.

Cybersecurity threats

A single weak point – an exposed API, an outdated plug-in, a distracted employee clicking the wrong link – can give attackers access to sensitive financial information. Ransomware attacks, credential stuffing, and supply chain hacks can happen to businesses of every size, and recovery costs can be steep.

How does Stripe facilitate electronic money movement?

Stripe makes it easier for businesses to move money electronically. Behind every online checkout, marketplace payout, or subscription renewal, there’s a web of banking rules, currency conversions, and compliance checks. Stripe handles these responsibilities for all types of businesses, from start-ups that are experimenting with new revenue models to enterprises that are increasing their global transactions.

Accepting payments

Stripe processes payments swiftly, safely, and across the following range of methods:

• Cards: Visa, Mastercard, American Express, and other major networks

• Bank transfers: ACH, Single Euro Payments Area (SEPA), and wire

• Digital wallets: Apple Pay, Google Pay, and other mobile-friendly options

• BNPL: Klarna, Afterpay, and other instalment-based payment solutions

• Crypto: Stablecoins and digital currencies for global transactions (currently available only in the United States)

Paying out

In addition to receiving money, businesses will be moving it out, either to vendors, gig workers, or their own bank accounts. Stripe offers instant payouts via linked debit cards and bank accounts. Stripe Connect makes it easier for platforms and marketplaces to automatically split and route funds to multiple parties. Companies such as Lyft and Shopify use Stripe Connect to send payments in real time to their drivers or independent sellers.

Managing recurring revenue

Stripe powers complex billing models and makes recurring revenue easier to manage.

• Subscription billing: Stripe Billing automates tiered pricing, free trials, and usage-based billing.

• Smart payment recovery: If a payment fails, Stripe retries it at the best times to increase the chance of success and reduce churn.

• Tax compliance: Stripe can calculate taxes across multiple countries, minimising the common pitfalls of global sales.

Facilitating global payments

Stripe helps businesses that operate internationally by providing the following:

• Multi-currency support: Businesses can accept and settle payments in more than 135 currencies.

• Foreign exchange optimisation: Holding balances in multiple currencies helps decrease unnecessary conversion costs.

• Local banking partnerships: Direct integrations with banking systems worldwide speed up settlement times.

Providing embedded finance, lending, and business banking

Stripe helps businesses move and manage their money with tools such as the following:

• Stripe Treasury: Platforms can embed financial services and offer their users accounts, payment cards, and tools with Stripe Treasury.

• Stripe Capital: Businesses can be approved for automated lending based on their payment histories using Stripe Capital.

• Stripe Issuing: Stripe Issuing enables businesses to create their own virtual and physical cards for expense management and customer rewards.