We all are familiar with cash payment and transaction. But have you heard about E-cash payment? Electronic cash is that the debit POS-system in euro operated by the German banking system. It’s a strictly PIN-based debit system where dealings are debited to the cardholder’s current account immediately after presentment of the transaction by the merchant to its bank. The corresponding card is often issued to the cardholder together with an account opening.
The electronic cash-system is intended to contribute to the consecutive replacement of money in the retail sector. One among its attractive assets from the merchant’s perspective is the payment guarantee given by the issuing bank after the effectual authorization. Due to its efficiency, electronic cash is ready to grow even in competition with different POS-systems. In fact for cardholders, electronic cash transactions are free of charge.
E-cash actually globalizes the economy, since the user will transfer cash into his cyber-wallet in any currency desired. A merchant will accept any currency and convert it to local currency once the cyber cash is uploaded to the bank account.
To the extent a user needs E-cash off-line, all that’s necessary is smart card technology. The cash is loaded onto the smartcard, and the special electronic wallets are used to offload the cash onto different smartcards or directly to an on-line system. Smartcards are used successful in different countries for such transactions as phone calls for a number of years. The cash might also be removed from a smartcard and returned to a bank account. Visa is also used as a related product, the stored value card and it comes in a kind of denominations, however functions more like a debit card than E-cash.
There are four major elements in an electronic cash system:
Furthermore Issuers are often banks, or non-bank institutions; customers are referred to users who pay E-Cash; merchants are vendors who receive E-Cash, and regulators are referred as related government agencies. For an E-Cash dealing to occur, we want to go through a minimum of three stages:
Customers will need to acquire E-Cash accounts through certain issuers. Merchants who would like to simply accept E-Cash will need to organize accounts from various E-Cash issuers. Issuers usually handle accounting for customers and merchants.
Customers purchase certain services or goods, and provides the merchants tokens that represent equivalent E-Cash. Purchase information is typically encrypted when sending in the networks.
Merchants will need to contact E-Cash issuers regarding the purchase and also the amount of E-Cash involved. E-Cash issuers can then authenticate the dealings and approve the amount E-Cash involved.
More and more, banks and different financial intermediaries can serve simply as storehouses for cash, lenders, and processing/verifying electronic transactions. Moreover Personal interaction with a teller, or perhaps visits to a bank ATM can become obsolete. All you have to do is turn on your computer.0