Electronic Currency/E-currency is also known as E-money, E-cash, digital money, digital cash, digital currency refers to money exchanged electronically from one party to another. It normally involves the use of computer networks, the internet and digitally stored value systems. The examples of electronic money include Electronic Funds Transfers (EFT), direct deposit and virtual currency.
Generally, E-currency can be divided into 2 categories. First one is the money balance recorded electronically on a “stored-value” card which has a microprocessor embedded; and the Second one is the network money exchange through the Internet. Click here on Electronic Money
Some successfully implemented “stored-value” card include Hong Kong’s Octopus card system, London Transport’s Oyster Card and Singapore’s electronic money program which focuses on its public transportation system.
As for the network money which is exchanged through the Internet, it enables us to send and receive money easily worldwide. For instance, everyone can now make online payment 24 hours from anywhere as long as there is internet access. In addition, other benefits to users include mass payments can be done with one click, collection of real-time online payment from sale of goods and services, and others. Click here for Benefits to users
Overall, although E-currency provides lots of benefits for us such as convenience and efficiency of transactions, lower transaction fees as mentioned before, etc., however, several potential issues still remain with the use of E-currency.
The potential issues can have macro-economic effects such as shortage of money supplies (total amount of e-currency VS total amount of real currency available). Another issue is computer crime due to lack of security, in which on-line criminals may steal e-currency or reduce an account’s amount of e-currency. Well, in order to prevent potential fraud issues to arise, the implementation of cyberspace laws and regulations is strongly needed to regulate such transactions.
Reference(s):
Electronic Money (Feb 7, 2011). Retrieved Feb 15, 2011, from http://en.wikipedia.org/wiki/Electronic_money
Benefits to users (n.d.). Retrieved Feb 15, 2011, from http://www.e-currency-directory.net/definition_e_currency.htm
Susan M. Sullivan. (n.d.). Electronic Money and Its Impact on Central Banking and Monetary Policy. Retrieved Feb 15, 2011, from http://econc10.bu.edu/Ec341_money/Papers/Sullivan_paper.htm
It is great to see that people in Hong Kong and London are using Electronic Currency in their daily life, so how about in Malaysia?
ReplyDeleteFor those payees who are using E-money, I guess it is important for them to be alert at anytime whenever they are doing a transaction, so that the amount of fraud cases would be reduced in the future.
ReplyDeleteS!ok:
ReplyDeleteOne good example is the Touch n Go card which is a “stored-value” card being used by people in Malaysia. Malaysians can use it for transportation purposes, such as to make payment for the toll expressway fees, and fares for the LRT trains and public buses.
SheryL:
ReplyDeleteAs always, safety comes first; they are reminded not to disclose any sensitive information such as credit card numbers to unknown and suspected websites.