Technological developments in the field of information and communication affect the emergence of new innovations inudelectronic payments. One of which is e-money (Electronic Money). In Indonesia, e-money has the potentials to substitute theudrole of money in cash for payments in retail transactions. According to Bank Indonesia Regulation No. 7/52/PBI/2005,udelectronic money (e-money) includes the Card Payment (APMK) such as debit cards, credit cards and ATM cards. Thisudresearch aims to analyze the relationship between the rate of use of e-money (Electronic Money) and the amount of moneyudcirculating in the community and how the velocity of money occurs. Secondary data, which were used in this study, obtainedudfrom the website of Bank of Indonesia. It was found that the use of e-money as an electronic payment instruments as anudalternative payment instrument has been beneficial, particularly for micro-payment and retail nature. The issue of e-moneyudcan act as a factor that changes the money demand function and reduce the average amount of cash held. This would increaseudcirculation of money in the economy which also means increase the velocity of money.
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