In recent years, digital payment systems have evolved rapidly across the globe—and Taiwan is no exception. Since the introduction of the Electronic Payment Institutions Act in 2015, new financial technologies and terminologies have flooded both public discourse and everyday transactions. From mobile wallets to blockchain-based tokens, it's easy to get lost in a sea of jargon.
This article breaks down seven key concepts—third-party payment, e-payment, mobile payment, digital currency, virtual currency, cryptocurrency, and token—clarifying their meanings, legal distinctions in Taiwan, and how they relate to one another. Whether you're a consumer, entrepreneur, or tech enthusiast, this guide will help you navigate the complex world of modern digital finance with confidence.
What Is Third-Party Payment?
Third-party payment refers to services that facilitate online transactions by acting as an intermediary between buyers and sellers. These platforms collect funds from customers and transfer them to merchants upon fulfillment of certain conditions—often after delivery confirmation.
In Taiwan, third-party payment is narrowly defined as online-only fund settlement services without account storage or peer-to-peer (P2P) transfers. A well-known example is Payment Link by PChome, which handles checkout processes for e-commerce sites.
As of late 2023, over 7,000 companies in Taiwan are registered under this category—including telecom giants like Chunghwa Telecom and convenience store chains like FamilyMart. However, these entities cannot store user funds directly unless they partner with banks under the "Operational Template for Banks Accepting Customers to Open Stored Value Payment Accounts via Internet." In such cases, money is held in bank accounts, not with the service provider.
A major regulatory advantage is that third-party payment operators can become direct merchant acquirers for credit card payments, streamlining transaction flows.
👉 Discover how secure digital transactions are shaping the future of finance.
Understanding E-Payment in Taiwan
E-payment goes beyond third-party services by combining fund storage, P2P transfers, and merchant payment processing under one regulated framework established by the Electronic Payment Institutions Act.
Unlike traditional banking systems, e-payment institutions can legally conduct inter-user fund transfers—something previously restricted under Article 29 of the Banking Act. This enables real-time money sending between individuals through apps like LINE Pay (powered by iPass, which holds both e-payment and electronic ticketing licenses).
Another closely related concept is electronic prepaid cards (e.g., EasyCard, iCash), governed by the Electronic Prepaid Card Issuance Management Regulations. While these allow fund loading and spending at affiliated merchants, they do not support direct person-to-person transfers.
So here’s a quick way to differentiate:
- Third-party payment: Online collection & disbursement only.
- Electronic prepaid card: Load funds + spend at stores.
- E-payment: All of the above plus P2P transfers.
The confusion between e-payment and electronic tickets even sparked public debate between Taipei Mayor Ko Wen-je and Taiwan’s Financial Supervisory Commission—highlighting how nuanced these distinctions can be.
What Exactly Is Mobile Payment?
Mobile payment simply means conducting financial transactions using a smartphone or wearable device. It's a behavioral shift, not a regulatory classification.
While often associated with smart devices today, mobile payment existed long before iPhones and Androids. In Japan, NTT Docomo’s i-mode service and Felica contactless technology enabled mobile payments on feature phones—a system so advanced it earned Japan early global leadership in cashless adoption.
However, due to Japan’s unique technical standards (known locally as Garakei or “Galápagos phones”), this innovation didn’t scale internationally. Meanwhile, global players like Apple Pay, Google Pay, and Samsung Pay focus on securely linking credit cards to mobile devices via tokenization and NFC.
Even SMS-based money transfers in Kenya—using basic 2G phones—are considered mobile payments. And yes, Sweden has taken it further with implanted microchips allowing people to pay with their hands.
Crucially, mobile payment ≠ third-party payment. The former describes the device used; the latter refers to the service model. Many third-party or e-payment providers build mobile apps because smartphones are ubiquitous—but the two concepts are distinct.
Digital Currency: The Broader Category
To understand Bitcoin and other crypto assets, we must first explore digital currency—a broad term referring to any value represented digitally. The Central Bank of Taiwan divides digital currencies into two main types: electronic money and virtual currency.
Electronic Money
Electronic money represents legal tender stored digitally—essentially cash in digital form. Examples include balances in e-payment accounts (like StreetVoice Wallet) or on transit cards (EasyCard). Although recorded electronically, these amounts are pegged directly to fiat currencies like TWD or USD.
Important note: Bank deposits aren’t classified as electronic money; they’re treated as clearing assets under monetary regulations.
Also relevant are gift cards (e.g., Starbucks Card), regulated under consumer protection laws. These single-merchant vouchers differ from multi-merchant electronic tickets but raise similar legal questions when scaled—especially for stablecoins like USDT.
Stablecoins backed by fiat reserves may resemble electronic money or prepaid cards. If widely circulated, issuers could face regulatory scrutiny over unauthorized fund management or quasi-banking activities.
Virtual Currency
Virtual currency exists outside traditional financial systems and isn’t denominated in fiat terms. Common examples include in-game currencies like World of Warcraft gold or League of Legends RP.
These can be categorized by convertibility:
- Closed-loop: Cannot be exchanged for real money (e.g., Mount & Blade’s denars).
Open-loop: Can be traded for fiat.
- One-way: Only purchasable with real money (e.g., Facebook Credits).
- Two-way: Exchangeable both ways (e.g., Linden Dollars in Second Life).
Historically, media outlets have used "virtual currency" loosely to describe cryptocurrencies like Bitcoin. But this term is too broad—after all, aren’t all digital balances “virtual”? Even central bank digital currencies (CBDCs) would technically qualify.
👉 See how blockchain is redefining ownership and value exchange worldwide.
Cryptocurrency: Beyond Virtual Currency
Cryptocurrency uses cryptography and decentralized networks (like blockchain) to enable trustless value transfer without central oversight. It evolved from earlier e-cash concepts but removes reliance on issuing authorities.
Bitcoin (BTC) and Litecoin (LTC) are prime examples of decentralized cryptocurrencies where transaction validation occurs across distributed nodes—not a single institution.
Some coins prioritize privacy—Zcash and Monero use advanced cryptographic techniques to obscure transaction details, making them closer to physical cash in terms of anonymity.
While “blockchain” dominates discussions, alternative architectures like DAG (Directed Acyclic Graph) and Blocklattice are emerging. Still, the core idea remains: enabling secure, transparent, and autonomous digital value exchange.
Token (通證): More Than Just a Coin
Tokens—often called "altcoins" or "shitcoins" in casual talk—are digital assets built on existing blockchains (e.g., Ethereum). But calling them mere “coins” undersells their potential.
Tokens represent more than just payment tools—they function as programmable digital credentials encoding rights such as:
- Access privileges
- Ownership shares
- Intellectual property licenses
- Identity verification
Initial Coin Offerings (ICOs) popularized utility tokens, while Security Tokens represent digitized securities (equity, debt, fund shares) with enhanced liquidity and traceability via blockchain.
Even identity management and personal data ownership are being explored through tokenization—ushering in what some call the “Age of Tokenization.”
Bitcoin proved that money could exist on a decentralized ledger. Now, tokens ask: Why stop at money? Why not ownership? Governance? Identity?
Thus, “token” should be understood not as “digital coin,” but as 通證 (tōngzhèng)—a circulating digital certificate of value or right.
Frequently Asked Questions
Q: Is Bitcoin considered electronic money in Taiwan?
A: No. Bitcoin is classified as a cryptocurrency or virtual asset—not electronic money—because it isn't issued or backed by a central authority or legal tender.
Q: Can I transfer money between friends using an electronic ticket like EasyCard?
A: Not directly. Electronic tickets don’t support P2P transfers. For such features, you need an e-payment service like LINE Pay or街口支付 (Jko Payment).
Q: What’s the difference between a third-party payment provider and an e-payment institution?
A: Third-party providers handle online collections only; e-payment institutions offer full-service features including fund storage, P2P transfers, and merchant payments—all under stricter regulation.
Q: Are NFTs considered tokens?
A: Yes. Non-fungible tokens (NFTs) are a type of token representing unique digital assets like art or collectibles, often built on blockchains like Ethereum.
Q: Is using cryptocurrency legal in Taiwan?
A: Yes. Owning and trading crypto is legal. However, crypto cannot be used as legal tender, and exchanges must comply with AML/KYC regulations.
Q: Can I issue my own stablecoin in Taiwan?
A: Potentially—but it carries legal risks. If your coin resembles a prepaid card or involves pooled user funds, it may fall under financial regulations requiring licensing.
👉 Start your journey into the world of decentralized finance safely and securely today.