Electronic Currency

What’s electronic currency? It refers to money or scrip which is exchanged only electronically. Typically, this involves use of computer networks, the internet and digital stored value systems. With all the tremendous technology, everything can be done electronically. You no longer have to drive out to buy but just click click click and everything DONE!

An example of digital stored value systems is Hong Kong Octopus Card which was the first contactless smart card system in the world and has since grown into a widely used payment system for virtually all public transport convenience stores, supermarkets, fast-food restaurants, on-street parking meters, car parks, and others.

Now, even Malaysia also has his very own touch n Go’ Touch n Go card, famous for its usage as a pre-load cash card used mainly for transportation and toll collection, is now expanding their applications and services towards the retail purchase, starting with particularly the fast-food industry like A&W, 7 eleven ant etc.

Pay Pal is one of the famous electronic currency which allows shoppers purchase through line. Exhibit below illustrate how Pay Pal is work.

Electronic currency is the most innovation products developed in financial and Internet circles recently, it has many advantages compare with the convention and offline medium of transaction.

1 Faster than a check

Online payments with PayPal’s Mass Payment are instant. Never again do you have to say "the check is in the mail."

2. Simple record-keeping

Minimize your accounting paperwork with a downloadable transaction history. Reconcile exceptions easily by automatically returning unclaimed funds.

3. All in One

Typically, Hong Kong Octopus Card is all in one. As a tourist, you will find Octopus indispensable for getting around Hong Kong's sights and shops as you won't need to buy individual tickets for different transport systems

4. Everyone can involve in conducting electronic currency

It doesn’t matter who you are. So long you have a computer and an account, you can start the transactions.

5. Convenience and low transactions cost

Electronic currency eliminates the usage of man power. This result in lower transaction fees compared to fees charged to a walk-in customer.

However, electronic currency will bring us benefits as well as problems. There are:

1. Privacy and security

The most obvious potential disadvantages about the concept of electronic currency are privacy and security issues. Although electronic currency is highly secured, it is not guarantee that the transaction information will not leak, if this happen, the information about individual purchasing patterns, financial information and health status might be sold to marketing companies. Worse, since the electronic currency is still a relative new technology, the high securities might not cover every possibility which a hacker can break into the system and illegally make purchase using other consumers’ identity.

2. Not widely accepted

Nowadays electronic currency is still not widely accepted by the public. This may be due to the fact that most people are still don’t confident and familiar with it .In addition to that, most consumers from non-developed countries or old generation are still more comfortable with present centuries-old medium of transactions – paper notes and coins.

3. Availability and interchangeability

The other potential disadvantages are availability and interchangeability of the electronic currency. Again, since it is still new as well as there are a number of companies which provides solutions for electronic currency, there is no one standard electronic currency that applies to all online cash transactions. For example in EBay, the most popular e-auction site, there are some categories of auction only accept Paypal for payments medium.