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Encyclopedia > Electronic money

Electronic money (also known as electronic cash, electronic currency, digital money, digital cash or digital currency) refers to money or scrip which is exchanged only electronically. Typically, this involves use of computer networks, the internet and digital stored value systems. Electronic Funds Transfer (EFT) and direct deposit are examples of electronic money. Also, it is a collective term for financial cryptography and technologies enabling it. For other uses, see Money (disambiguation). ... Scrip is any substitute for currency which is not legal tender, and is often a form of credit. ... Electronics is the study and use of electrical devices that operate by controlling the flow of electrons or other electrically charged particles in devices such as thermionic valves and semiconductors. ... Computer networks may be classified according to the network layer at which they operate according to some basic reference models that are considered to be standards in the industry such as the seven layer OSI reference model and the four layer Internet Protocol Suite model. ... A value system is in essence the ordering and prioritization of the ethical and ideological values that an individual or society holds. ... Electronic funds transfer or EFT refers to the computer-based systems used to perform financial transactions electronically. ... what is it thomas? A giro, also called a direct deposit, is a banking term for a method of payment. ... Financial cryptography (FC) is the use of cryptography in applications with strong financial motivation. ...


While electronic money has been an interesting problem for cryptography (see for example the work of David Chaum and Markus Jakobsson), to date, use of digital cash has been relatively low-scale. One rare success has been Hong Kong's Octopus card system, which started as a transit payment system and has grown into a widely used electronic cash system. Another success is Canada's Interac network, which in 2000 at retail (in Canada) surpassed cash [1] as a payment method. Singapore also has an electronic money implementation for its public transportation system (commuter trains, bus, etc), which is very similar to Hong Kong's Octopus card and based on the same type of card (FeliCa). The German Lorenz cipher machine, used in World War II for encryption of very high-level general staff messages Cryptography (or cryptology; derived from Greek κρυπτός kryptós hidden, and the verb γράφω gráfo write or λεγειν legein to speak) is the study of message secrecy. ... David Chaum Election People This box:      David Chaum is the inventor of many cryptographic protocols and has contributed to the advancement of electronic cash. ... There are very few or no other articles that link to this one. ... Obverse side of a standard adult card. ... Wikipedia does not have an article with this exact name. ... Interac Logo Interac Association is a Canadian organization linking enterprises that have proprietary networks so that they may communicate with each other for the purpose of exchanging electronic financial transactions. ... FeliCa is a contactless IC chip smart card system by Sony, primarily used in electronic money cards. ...

Contents

Alternative systems

Technically electronic or digital money is a representation, or a system of debits and credits, used (but not limited to this) to exchange value, within another system, or itself as a stand alone system, online or offline. Also sometimes the term electronic money is used to refer to the provider itself. A private currency may use gold to provide extra security, such as digital gold currency. An e-currency system may be fully backed by gold (like e-gold and c-gold), non-gold backed (like eeeCurrency), or both gold and non-gold backed (like e-Bullion and Liberty Reserve). A private currency is a currency issued by a private institution. ... e-gold is, according to their website, 100% backed by gold Digital gold currency (or DGC) is a form of electronic money denominated in gold weight. ... e-gold is a digital gold currency operated by Gold & Silver Reserve Inc. ... eeeCurrency is a form of electronic money, based in Panama City, Panama. ... e-Bullion is a digital gold currency founded by Jim Fayed and his wife, Pam Fayed. ... Liberty Reserve is an online payment system and provider of digital gold currency (LR-gold). ...


Many systems will sell their electronic currency directly to the end user, such as Paypal and WebMoney, but other systems, such as e-gold, sell only through third party digital currency exchangers. eBay North First Street satellite office campus (home to PayPal) PayPal is an e-commerce business allowing payments and money transfers to be made through the Internet. ... WebMoney is an electronic money and online payment system (transactions are conducted through WebMoney Transfer). ... Digital currency exchangers (DCEs, independent exchange providers or e-currency exchangers) are market makers which exchange fiat currency for electronic money, such as digital gold currency (DGC), and/or convert one type of digital currency (DC) into another, such as WebMoney into e-gold. ...


In the case of Octopus Card in Hong Kong, deposits work similarly to banks'. After Octopus Card Limited receives money for deposit from users, the money is deposited into banks, which is similar to debit-card-issuing banks redepositing money at central banks.


Some community currencies, like some LETS systems, work with electronic transactions. Cyclos Software allows creation of electronic community currencies. In economics, a local currency is a currency not backed by a national government, and intended to trade only in a small area. ... Local Exchange Trading Systems (LETS) are local, non-profit exchange networks in which all kinds of goods and services can be traded without the need for money. ...


Ripple monetary system is a project to develop a distributed system of electronic money independent of local currency. Ripple is an open-source software project for developing a peer-to-peer distributed social network service with a monetary honor system based on trust that already exists between people in real-world social networks. ...


Virtual debit cards

Various companies now sell VISA, Mastercard or Maestro debit cards, which can be recharged via electronic money systems. This system has the advantage of greater privacy if a card provider is located offshore, and greater security since the client can never be debited more than the value on the prepaid card. Such debit cards are also useful for people who do not have a bank account. Generally cards can be recharged with either e-gold, e-Bullion, WebMoney, or via a wire transfer. “VISA” redirects here. ... MasterCard Worldwide (NYSE: MA) is a membership organization owned by the 25,000+ financial institutions that issue its card. ... Maestro is an international debit card service; a joint venture by MasterCard and Europay International. ... Privacy has no definite boundaries and it has different meanings for different people. ... For other uses, see Security (disambiguation). ... e-gold is a digital gold currency operated by Gold & Silver Reserve Inc. ... e-Bullion is a digital gold currency founded by Jim Fayed and his wife, Pam Fayed. ... WebMoney is an electronic money and online payment system (transactions are conducted through WebMoney Transfer). ... A wire transfer is a method of transferring of funds from one entity to another. ...


Advantages

Most money in today’s world is electronic, and tangible cash is becoming less frequent. With the introduction of internet / online banking, debit cards, online bill payments and internet business, paper money is becoming a thing of the past.


Banks now offer many services whereby a customer can transfer funds, purchase stocks, contribute to their retirement plans (such as Canadian RRSP) and offer a variety of other services without having to handle physical cash or cheques. Customers do not have to wait in lines; this provides a lower-hassle environment.


Debit cards and online bill payments allow immediate transfer of funds from an individual's personal account to a business's account without any actual paper transfer of money. This offers a great convenience to many people and businesses alike.


Disadvantages

Although there are many benefits to digital cash, there are also many significant disadvantages. These include fraud, failure of technology, possible tracking of individuals and loss of human interaction.


Fraud over digital cash has been a pressing issue in recent years. Hacking into bank accounts and illegal retrieval of banking records has led to a widespread invasion of privacy and has promoted identity theft. [citation needed]


There is also a pressing issue regarding the technology involved in digital cash. Power failures, loss of records and undependable software often cause a major setback in promoting the technology. [citation needed]Privacy questions have also been raised; there is a fear that the use of debit cards and the like will lead to the creation of a global tracking system by the banking industry. Some people are working on anonymous ecash to try to address this issue. The issue of providing anonymity to users itself introduces more problems, however; there is the distinct possibility that a fully anonymous digital cash system could permit the "perfect crime" - i.e., where a criminal uses someone else's electronic cash to make a payment, but cannot be traced - to occur. For this reason, 'revokable anonymity' is a suggested solution: a user is fully anonymous until they commit some crime, at which point authorisation is given for their identity to be revealed. However, critics of this policy point out that the anonymous users will never be caught and held trial (thus their identity will never be revealed) without tracing.[citation needed] Privacy has no definite boundaries and it has different meanings for different people. ... For other uses, see Bank (disambiguation). ... Ecash (or e-cash), short for electronic cash, is an electronic payment. ...


Future evolution

The main focuses of digital cash development are 1) being able to use it through a wider range of hardware such as secured credit cards; and 2) linked bank accounts that would generally be used over an internet means, for exchange with a secure micropayment system such as in large corporations (PayPal). Micropayments are means for transferring very small amounts of money, in situations where collecting such small amounts of money with the usual payment systems is impractical, or very expensive, in terms of the amount of money being collected. ... eBay North First Street satellite office campus (home to PayPal) PayPal is an e-commerce business allowing payments and money transfers to be made through the Internet. ...


Furthering network evolution in terms of the use of digital cash, a company named DigiCash is at the focus of creating an e-cash system that would allow issuers to sell electronic coins at some value. When they are purchased they come under someone’s own name and are stored on his computer or under his online identity. At all times, the e-cash is linked to the e-cash company and all transactions go through it, so the e-cash company secures anything that is purchased. Only the company knows your information and will properly direct purchases to your location.


Theoretical developments in the area of decentralized money are underway that may rival traditional, centralized money. Systems of accounting such as Altruistic Economics are emerging that are entirely electronic, and can be more efficient and more realistic because they do not assume a zero-sum transaction model. Zero-sum describes a situation in which a participants gain (or loss) is exactly balanced by the losses (or gains) of the other participant(s). ...


See also

Numismatics Portal

Image File history File linksMetadata Download high resolution version (910x910, 596 KB)Media:Example. ... e-gold is, according to their website, 100% backed by gold Digital gold currency (or DGC) is a form of electronic money denominated in gold weight. ... A private currency is a currency issued by a private institution. ... Ripple is an open-source software project for developing a peer-to-peer distributed social network service with a monetary honor system based on trust that already exists between people in real-world social networks. ... Anonymous Internet Banking is the name given to the proposed use of strong financial cryptography to make electronic bank secrecy (or more precisely pseudonymous banking) possible. ... The cypherpunks (from cipher and punk) comprise an informal group of people interested in privacy and cryptography who originally communicated through the cypherpunks mailing list. ... Reverse of a French bank card including the Moneo logo. ... Visa Cash is a smart card electronic cash system owned by VISA. Trialled in various locations Worldwide (including Leeds, UK in 1997), the system works via a chip embedded in a bank card, and looks similar to the so-called Chip and PIN cards issued in inter alia France and... Mondex is a smart card electronic cash system which was developed originally by National Westminster Bank and subsequently sold to MasterCard International. ... Qpass is a technology company that specialises in providing the infrastructure for electronic payments. ... ISO 8583 Standard for Financial Transaction Card Originated Messages - Interchange message specifications is the International Organization for Standardization standard for systems that exchange electronic transactions made by cardholders using payment cards. ... Automated Clearing House (ACH) is the name of an electronic network for financial transactions in the United States. ... Scrip is any substitute for currency which is not legal tender, and is often a form of credit. ...

External links

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  Results from FactBites:
 
ECB: Report on electronic money (633 words)
Although electronic money is not a widespread phenomenon at present, it is likely to have significant implications for monetary policy in the future.
There are a number of additional regulatory concerns regarding electronic money which also have to be taken into account, such as the efficient functioning of payment systems and confidence in payment instruments, the protection of customers and merchants, the stability of financial markets and protection against criminal abuse.
In addition to the minimum requirements outlined above, the interoperability of electronic money schemes and the adoption of adequate guarantee, insurance or loss-sharing schemes are two further objectives which it is deemed desirable to pursue.
Electronic money - Wikipedia, the free encyclopedia (1127 words)
Electronic money (also known as electronic cash, electronic currency, digital currency, digital money or internet money) refers to money which is exchanged only electronically.
Electronic Funds Transfer (EFT) and direct deposit are examples of electronic money.
The electronic money, known as EZLink by most Singaporeans, is a card the size of an ordinary credit card; it has a smart chip plus a wireless communication module.
  More results at FactBites »

 
 

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