|
Electronic money (also known as electronic cash,
electronic currency, digital money, digital cash,
digital currency or scrip) refers to
money
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.
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
has a very successful 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 electronic money, known as
EZ-Link
by most Singaporeans, is a card the size of an
ordinary
credit card;
it has a smart chip plus a wireless communication
module. Passengers just need to tap the EZ-Link
when they board the bus and tap the card again
when they alight; the bus fare system
automatically deducts the calculated bus fare from
the EZ-Link value. Recently,
McDonalds
is setting up EZ-Link payment infrastructure at
their fast-food branches all over Singapore's main
island. It is believed that in the near future EZ-Link
will gain more acceptance as a convenient
electronic money solution in Singapore.
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 checks. 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.
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.
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.
Privacy
questions have also been raised; there is a fear
that the use of debit cards and the like will lead
to the creation by the
banking
industry of a global tracking system. Some people
are working on anonymous
e-cash
to try to address this issue.
|
