The establishment and development of electronic money have been natural and obvious consequences of both the evolution of payment systems and the technological development. However, the definition and classification of this phenomenon are not as obvious. Although a number of major financial institutions have attempted to define the "new form of payment," none of such definitions has been universally accepted. A comparison of several of the most often quoted definitions confirms that they differ in their description of the nature of electronic money as well as in the level of detail.

Discussions in professional publications concerning the classification of electronic money prove that it cannot be unambiguously stated whether it is the equivalent of cash or a new type of non-cash money. Another view is that there are no reasons for classifying it as a new type of money (along cash and non-cash money). This has stirred ongoing deliberations concerning whether electronic money should be treated as money in the narrow or broad sense and whether electronic money is really money or rather a payment instrument.

Differing views with regard to the classification of electronic money have directly prompted an analysis aiming to present its characteristics. The article also examines similarities and differences vis-a-vis traditional forms of money (cash and non-cash) as well as selected means of settlement (e.g. payment cards).

The objective of the analysis has been to present the position of electronic money within the modern theory of money, and to point out that it should be treated as complementary and not as a competitor with regard to the types of money and instruments of settlement used to date.