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Modulr glossary

Programmable Money

Programmable money refers to digital currency that has built-in logic, allowing it to execute specific functions based on predefined rules. It enables automated payments, conditional transfers, and advanced financial workflows without manual intervention. Programmable money is commonly used in smart contracts, central bank digital currencies (CBDCs), and DeFi applications. Programmable money is intrinsic to a number of evolving areas in fintech, from Smart Contracts, to Digital Currencies and Central Bank Digital Currencies (CBDC).

Applications

E-commerce:

Reduces fraud in online card payments by verifying the cardholder's identity

Banking and fintech:

Helps issuers and payment providers comply with Strong Customer Authentication (SCA) requirements.

Advantages

  • Enhanced security: Reduces unauthorised transactions by verifying that the genuine account holder is authorising the payment
  • Fraud prevention: Helps reduce chargebacks related to fraud.

Challenges

  • User Experience: Additional authentication steps can cause friction and increase checkout abandonment
  • Implementation complexity: Requires integration with card schemes and issuer systems.

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