It’s seems like currency is available everywhere, sometimes. On your phone, in apps, in video games, the list goes on. Let’s do a deep dive into what different types of currencies actually exist and what we need to look out for to keep our money safe.
Digital currency, cryptocurrency, virtual currency
Digital currency is a form of currency that is owned and used through computers or digital wallets – unlike physical currencies, such as cash. Digital currency isn’t new, but it can take many forms. Cryptocurrency (e.g., Bitcoin) is different from everyday government-issued currency because it’s encrypted and decentralized (which means it can be issued by multiple parties). Virtual currency, on the other hand, is only stored and used through a specific software or app, like a video game. Similarly, services such as Apple Pay or Google Pay act as payment options when buying goods or services online. The most common use of digital currency is for sending and receiving money, as it’s often much more convenient than taking cash out of an ATM.
How do I do that?
Electronic transfer transactions, or “e-Transfers”, are a real gamechanger in the world of personal banking. This is a funds transfer service, run by Interac†, between two people’s or businesses’ bank accounts – as long as that bank is Canadian. This makes sending money super convenient, and also helps you keep a record of the money you’re sending and receiving. Most student bank accounts (for those 18+) offer unlimited Interac e-Transfer transactions, which can come in really handy if you’re at school and want to split costs or bills with friends.
More on online money transfers
Services like PayPal are online financial companies that allow you to pay for items, or transfer money, using a secure internet account. Unlike Interac e-Transfer, services like PayPal allow you to send international money transfers which can be really helpful when travelling abroad. You will often find PayPal or similar services such as Apple Pay or Google Pay as payment options when buying goods or services online. International money transfers are also offered by the banks (for example, Scotiabank's International Money Transfer) as a safe and easy way to send money from your Canadian bank account – through online banking or the mobile app – to an international bank account.
And, what about…
Twitch Bits, TikTok Coins, Animal Crossing Bells – where do these fit in? These are forms of virtual currency, also called in-app or in-game currency. These currencies are issued and controlled by the company you’re using them with and, typically, only have value to that company and its users. These currencies are often paid for using real money, like the Canadian dollar, but can only be used on the platform where they’re purchased. Making purchases in-app isn’t necessarily a bad thing, as it’s a key way to support the creators of games and apps you love and can elevate your in-app experience, but it’s worth noting they should be managed in the same way you do your other currencies to avoid risk and over-spending.
Let’s get started.
It’s clear that online currency has both its pros and cons but one thing we can all agree on is the importance of knowing where and how you’re spending your money. Make a list of the top five apps you spend the most time on. Now, do some research into how digital currency plays a role within the app or game so you’re never caught off guard!