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Electronic money. E-cash can be stored
and spent in a number of ways which generally involve storing digital tokens
representing dollars, pounds or any other currency in some sort of
electronic medium, such as a smart card or an electronic wallet on a
computer's hard disk. anyone wanting to spend money transfers these tokens
to the recipient's electronic piggy bank, either by transmitting them across
an internet connection or by handing over the smart card.
E-cash's principal
advantages are the speed and security of the transactions it allows. There
are hundred of e-cash systems in commercial development, and companies such
as mondex have conducted consumer trials in the UK, the United States and
Europe. Each uses its own complex blend of encryption technologies,
including digital signatures and systems such as ssl, which
make it hard for unauthorised people to intercept payments or break into
electronic storage mechanisms.
One form of e-cash that seems likely
to succeed is the electronic purse, a smart card armed with a chip that can
download cash from suitably equipped atms. Users of these
cards will be able to make small purchases from participating retailers and
have the cost deducted straight from the chip on the card rather than via a
complex banking transaction. Banks and credit-card companies such as Visa
and Mastercard are pursuing this idea with vigour, although their efforts
are currently being hampered by the difficulty of enforcing suitable
standards on a global basis. |
