Electronic currency

Basically, electronic 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 and currency. Also, it is a collective term for financial cryptography and technologies enabling it.


While electronic money and currency has been an interesting problem for cryptography, and the 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. 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). There are also one implementation is in the Netherlands, known as Chipknip.


We will look into the Touch 'n Go system which is an electronic purse that can be used at all highways in Malaysia, major public transports in Klang Valley, selected parking sites and theme park. Touch ‘n Go uses contactless smartcard technology. The card looks similar to a credit card. User can continue using the card as long as it is pre-loaded with electronic cash. User can reload the card at toll plazas, train stations, Automated Teller Machines, Cash Deposit Machines, Petrol kiosks and at authorised third party outlets. Reload denomination is ranging from RM20 to RM500. Touch ‘n Go enhances the speed of paying for low value but high frequency transactions. Apart from the speed, it is also very convenient because user no longer need to prepare for small change or wait in queue at the cash lane to complete the transaction. Touch 'n Go Sdn Bhd (formerly known as Rangkaian Segar Sdn Bhd), the operator of this Electronic Payment System, has several range of Touch ‘n Go cards to suit different market ned.


On the other hand, the main focuses of digital cash development are being able to use it through a wider range of hardware such as secured credit cards; and 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). 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.

Mobile payment system in Malaysia: Its potential and consumers' adoption strategies

In Malaysia, mobile payment is developing fast in recent years. The mobile channel effectively used as a self-funding and revenue generating medium. This service covers all mobile operators on Malaysia; it’s for prepaid and postpaid service billings.

POTENTIAL OF M-PAYMENT

Simplicity and Usability: The m-payment application must be user friendly with little or no learning curve to the customer. The customer must also be able to personalize the application to suit his or her convenience.

Universality: M-payments service provide for transactions between one customer to another customer (C2C), or from a business to a customer (B2C) or between businesses (B2B). The coverage should include domestic, regional and global environments.

Interoperability: Development should be based on standards and open technologies that allow one implemented system to interact with other systems.

Trust, Privacy and Security: Customers' credit or debit card information is not be misused by the mobile payment application provider. Besides that, the customers' transactions record privacy is not be lost. Lastly, the system is foolproof, resistant to attacks from hackers and terrorists.

Cost: The m-payments is less cost than existing payment mechanisms to the extent possible. A m-payment solution is compete with other modes of payment in terms of cost and convenience.

Speed: The speed at which m-payments are executed must be acceptable to customers and merchants.

Cross border payments: To become widely accepted the m-payment application is available globally.

CONSUMER’S ADOPTION STRATEGIES

Telecommunication Company Billing of M-Payments

Customers may make payment to merchants using their mobile phone and this may be charged to the mobile phone bills of the customers. The customers will settle the bill with the telecommunication company.

Bank Account based M-Payment

In this model, the bank account is linked to the mobile phone number of the customer. When the customer makes an m-payment transaction with a merchant, the bank account of the customer is debited and the value is credited to the merchant account.

Credit Card based M-Payment

In this model, the credit card number is linked to the mobile phone number of the customer. When the customer makes an m-payment transaction with a merchant, the credit card is charged and the value is credited to the merchant account. Credit card based solutions have the limitation that it is heavily dependent on the level of penetration of credit cards in the country.

Related link

http://www.mobile-money.com

http://www.netbuilder.com.my

www.netbuilder.com.my

Malaysia Online Payment

http://www.neowave.com.my/mobilemoney_overview.asp

Credit Card debts: Causes and Prevention

Now days it seems that credit cards are almost a necessity, rather than a luxury, which has caused many people to have a huge problem with credit card debt. Many people now have more than one credit card with a balance and you may even be one of those people. If you are one of the millions of people wanting to get out of credit card debt, then you first need to understand what caused the credit card debt problem to begin with.

A credit card is exactly what the name implies. It is a card with which you are able to use by borrowing on credit. Every time you use a credit card, you are borrowing money from the credit card issuer. Also, each time you use your credit card, you are increasing your credit card debt.

Debt consolidation programs are swamped with applicants. While many have turned to these programs to help get them out of debt, you can save money and do the work yourself. If you receive pre-approved credit card applications in the mail, save them! They can actually help you save a ton of money and interest charges.

1. Photocopy the credit card offer, including the interest rate and terms. Create a letter to your credit card company/companies stating that you are thinking of switching to their competition because they are offering a far more reasonable interest rate. Credit card companies do not want to lose your business. Nine times out of ten they will match or even offer a lower rate than the competition has offered.

2. If you can afford it, pay double the minimum payment. The minimum payment usually pays just enough to cover the interest and a little more that pays down the balance. Paying extra will pay your balance more quickly.

3. Pay off smaller balances first. It is common for a person to try to focus on their cards with larger balances first. Pay off the smaller ones. It will take less time and you will feel a sense of satisfaction when you have actually completed your goal. This will boost your confidence and make it easier to tackle the higher balances.

4. Cut up your cards so that you are not tempted to use them. Save one card for emergencies.

Causes of consumer using credit cards

1.My credit card is my emergency fund.

Why bother saving up money for an emergency in a savings account? Don’t savings accounts pay only 1% interest anyways? I’ll just use my credit card in an emergency. I’ll find the money to pay it off whenever the bill comes in.

2.You can buy whatever you want now.

You’ll be able to pay it off later. That shiny HDTV and sound system are literally calling your name. You’ll pay them off in a few months and get to enjoy them now. Isn’t that what life is about? Plus, Circuit City is going under… there are bound to be a ton of deals you can buy now and pay for later.

3.Spending is your comfort activity.

You had a rough day, week, or month. Spending feels good. You can pay it off later, but for now it just makes everything a little bit brighter in your day.

Of course all of these are terrible reasons for credit card debt, but yet there are still many credit card holders and there are still alot more of reasons to have a credit card.

The Application of Pre-paid Cash Card for Consumers

Introduction

In the current situation now, banks are pushing for the use of prepaid cash cards as people have been abusing the power of credit cards and ended up over spending by using the future money. banks will still earn a certain % of interest if you use a prepaid cash card in a store and it has less risk of having people who cannot pay up the bills as you will need to reload credit into the prepaid cash cards only then you are able to use it.

The first question I want to you all is : Should we use prepaid cash cards to buy things or credit cards? The second question is: What is the difference of using it and how does it affect us?

Prepaid Cash Card

Prepaid cash card provides convenience to consumers to make payments without using credit or using large amount of hard cash to purchase a certain product. Besides that, unlike credit cards, where you are encouraged and tempted to spend the future money, prepaid cash cards provide a better personal budget and is better at limiting a person's spending nature according to his or her current earning power, as a person is only allowed to spend funds already credited into the prepaid cash card and not spending money that could be repaid by instalments like credit cards, which is the reason why so many young people are running into huge debts now.Prepaid cash cards are designed to be used as a safer alternative as compare to cash.

How does a prepaid cash card work?

Firstly, Money can be credited into a prepaid card by cash at bank, post office, bank transfer or by even through employer.

After crediting enough money into the prepaid cash card, you can start buying products on the street as long as you have enough credit for the product. When you are purchasing a product, simply hand over the prepaid cash card to the cashier and you will be asked to key in your PIN number. The amount of the product will be deducted from you card.

Benefits

• One can easily own a prepaid debit card as there is no need to worry about past financial history.






• It is safer to carry a prepaid debit card than to carry huge amount of money outside






• If debit card is stolen,you will at the most lose the amount of credit in the debit card.






• It also discourages overspending and curbs extravagant spending habit

Examples of prepaid cash card and its application:

Touch n go is one of the examples of prepaid cash cards. It is commonly used by road users on highways and also for major public transport for example LRT, KTM. Nowadays Touch n go can also be used to buy burgers at a certain location.

It looks similar to credit cards and users have to reload in an amount of money ranging from RM20 to RM 500.

It is useful as it speeds up the low value but has higher transaction process type of products. People no longer have to look out for small changes during transactions.



Another example is the bankfreedom card.
This card allows you to make purchases and manage your money with ease. This Reloadable Bank Freedom MasterCard is guaranteed approved and is backed by MasterCard Zero Liability policy. So you are protected from any unauthorized purchases.

It also allows you to pay bills and reserve car rentals, hotels, motels, and airline tickets .

You can also transfer money to your family members should they run out of credit in their prepaid cash card.

PB Utar Debit Mastercard is another example of a prepaid cash card. You can withdraw money from any Mastercard ATM worldwide.

There is also special privillege like having a RM10 service fee waived if you withdraw from a Public Bank ATM.


Other than that, it is useful for parents to apply this card for their children who are studying in a university because this way, it can help curb the spending habits of their children.


Reference:

http://www.moneysupermarket.com/prepaidcards/prepaid-cards-guide2.asp

http://www.publicbank.com.my/en/en_content/personal/cards/master_utar.html

http://www.economywatch.com/debit-card/prepaid.html

http://www.galttech.com/research/finance/debit-card.php